Enhanced health insurance subsidies that helped millions of Americans afford coverage under the Affordable Care Act (ACA) have expired as 2026 begins. These tax credits were designed to lower the cost of premiums for people who buy insurance on their own rather than through an employer or a public program like Medicare or Medicaid. With no extension passed by Congress, many are seeing dramatic increases in their health insurance costs.
Expanded subsidies were first introduced in 2021 as part of pandemic-era relief. They made health coverage affordable for more people by reducing or eliminating monthly premiums for lower-income enrollees and capping costs for middle-income households. For four years, these credits helped more than 20 million people keep insurance they might otherwise struggle to afford.
Now that those enhancements have lapsed, Americans who relied on them are facing much bigger bills. Analysts from the Kaiser Family Foundation estimate average premiums will jump by about 114% in 2026 compared with last year. In real terms, that means monthly health insurance payments that were once under $300 for some could rise to almost $500 or more. Others are facing even steeper increases. One social worker reported that her premium jumped from about $85 a month to nearly $750.
These increases hit a broad group of people. They affect self-employed workers, small business owners, farmers, freelancers, and others who do not qualify for Medicaid or Medicare but do not have employer-sponsored coverage. With the subsidies gone, many middle-income families that previously paid a predictable share of their income for health insurance are now bearing the full market cost.
The political fight over these subsidies helped trigger a lengthy government shutdown last year. Democratic lawmakers tried to secure an extension, and some moderate Republicans expressed concern about the financial impact on voters ahead of the 2026 election year.
President Donald Trump briefly proposed alternatives but ultimately withdrew the plans after conservative backlash. In the end, lawmakers failed to agree on a solution before the deadline. A House vote on a possible three-year extension is now expected in January, but its outcome is uncertain.
Health policy experts warn that higher premiums could push people out of coverage altogether. Younger and healthier enrollees are most likely to decide it is no longer worth paying for insurance. One study by research groups including the Urban Institute projected that nearly 5 million people could drop their coverage in 2026 because of the cost increases. If that happens, the pool of insured people could skew older and sicker, making the market more expensive overall.
People directly affected described the strain the changes are placing on their finances. Some say they feel abandoned by the political process. One single mother shared her frustration that lawmakers have not acted sooner to prevent the loss of subsidies that had become essential for her family. Many Americans say they cannot afford the new premiums and fear being uninsured for the first time in years.
As open enrollment continues in many states until mid-January, advisers are urging consumers to double-check plan options and seek help with understanding subsidies and other cost-saving tools that may still be available. But with federal support reduced, navigating the insurance marketplace has become more complicated and costly for millions.
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