Obamacare Subsidies EXPIRE, Causing 114% Increase in Premiums
As 2026 begins, millions of Americans enrolled in Affordable Care Act (ACA) health insurance plans—commonly known as Obamacare—are grappling with sharply higher costs following the expiration of enhanced premium subsidies. These temporary boosts, first introduced in 2021 under the American Rescue Plan Act and extended through 2025 by the Inflation Reduction Act, made coverage more affordable by capping premium contributions as a percentage of income and expanding eligibility.
Without congressional action to renew them, the subsidies reverted to their pre-2021 levels at the end of last year, leading to widespread premium hikes. According to health policy experts, this change has resulted in an average 114% increase in out-of-pocket premium payments for subsidized enrollees, jumping from about $888 annually in 2025 to $1,904 in 2026.
The impact is particularly acute for the over 20 million people who relied on these enhanced tax credits to offset monthly premiums. For instance, middle-income individuals earning around $28,000 a year could see their annual costs for a benchmark plan rise from $325 to $1,562—a staggering $1,238 jump.
Insurers have also raised gross premiums by a median of 18% this year, driven by rising healthcare costs and the anticipated loss of healthier enrollees who may drop coverage due to unaffordability.
Early data shows enrollment in ACA plans has already dropped by about 1.4 million compared to last year, with experts attributing this to the subsidy cliff. In states like Texas, where marketplace reliance is high, residents in areas such as Houston may face even steeper localized increases, though national averages highlight the broad pain.
The fallout extends beyond individual budgets, potentially increasing the uninsured rate by millions and straining the economy. The Congressional Budget Office projects 2.2 million more uninsured Americans in 2026 alone, while analyses suggest nearly 340,000 job losses nationwide due to reduced healthcare spending.
Congress has debated extensions, with the House passing a three-year renewal bill, but Senate approval remains uncertain amid partisan divides.
For now, many enrollees are switching to cheaper, less comprehensive plans or forgoing coverage altogether, raising concerns about a brewing health insurance crisis. As debates continue, affected individuals are urged to explore state-specific aid or recalculate eligibility through healthcare.gov.