Health subsidies expire, launching millions of Americans into 2026 with
steep insurance hikes
[January 02, 2026]
By ALI SWENSON
NEW YORK (AP) — Enhanced tax credits that have helped reduce the cost of
health insurance for the vast majority of Affordable Care Act enrollees
expired overnight, cementing higher health costs for millions of
Americans at the start of the new year.
Democrats forced a 43-day government shutdown over the issue. Moderate
Republicans called for a solution to save their 2026 political
aspirations. President Donald Trump floated a way out, only to back off
after conservative backlash.
In the end, no one’s efforts were enough to save the subsidies before
their expiration date. A House vote expected in January could offer
another chance, but success is far from guaranteed.
The change affects a diverse cross-section of Americans who don’t get
their health insurance from an employer and don’t qualify for Medicaid
or Medicare — a group that includes many self-employed workers, small
business owners, farmers and ranchers.
It comes at the start of a high-stakes midterm election year, with
affordability — including the cost of health care — topping the list of
voters’ concerns.
“It really bothers me that the middle class has moved from a squeeze to
a full suffocation, and they continue to just pile on and leave it up to
us,” said 37-year-old single mom Katelin Provost, whose health care
costs are set to jump. “I’m incredibly disappointed that there hasn’t
been more action.”
Some families grapple with insurance costs that are doubling,
tripling or more
The expired subsidies were first given to Affordable Care Act enrollees
in 2021 as a temporary measure to help Americans get through the
COVID-19 pandemic. Democrats in power at the time extended them, moving
the expiration date to the start of 2026.
With the expanded subsidies, some lower-income enrollees received health
care with no premiums, and high earners paid no more than 8.5% of their
income. Eligibility for middle-class earners was also expanded.
On average, the more than 20 million subsidized enrollees in the
Affordable Care Act program are seeing their premium costs rise by 114%
in 2026, according to an analysis by the health care research nonprofit
KFF.
Those surging prices come alongside an overall increase in health costs
in the U.S., which are further driving up out-of-pocket costs in many
plans.
Some enrollees, like Salt Lake City freelance filmmaker and adjunct
professor Stan Clawson, have absorbed the extra expense. Clawson said he
was paying just under $350 a month for his premiums last year, a number
that will jump to nearly $500 a month this year. It’s a strain for the
49-year-old but one he’s willing to take on because he needs health
insurance as someone who lives with paralysis from a spinal cord injury.
Others, like Provost, are dealing with steeper hikes. The social
worker’s monthly premium payment is increasing from $85 a month to
nearly $750.
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 Effects on enrollment remain to
be seen
Health analysts have predicted the expiration of the subsidies will
drive many of the 24 million total Affordable Care Act enrollees —
especially younger and healthier Americans — to forgo health
insurance coverage altogether.
Over time, that could make the program more expensive for the older,
sicker population that remains.
An analysis conducted last September by the Urban Institute and
Commonwealth Fund projected the higher premiums from expiring
subsidies would prompt some 4.8 million Americans to drop coverage
in 2026.
But with the window to select and change plans still ongoing until
Jan. 15 in most states, the final effect on enrollment is yet to be
determined.
Provost, the single mother, said she is holding out hope that
Congress finds a way to revive the subsidies early in the year — but
if not, she’ll drop herself off the insurance and keep it only for
her four-year-old daughter. She can’t afford to pay for both of
their coverage at the current price.
Months of discussion, but no relief yet
Last year, after Republicans cut more than $1 trillion in federal
health care and food assistance with Trump’s big tax and spending
cuts bill, Democrats repeatedly called for the subsidies to be
extended. But while some Republicans in power acknowledged the issue
needed to be addressed, they refused to put it to a vote until late
in the year.
In December, the Senate rejected two partisan health care bills — a
Democratic pitch to extend the subsidies for three more years and a
Republican alternative that would instead provide Americans with
health savings accounts.
In the House, four centrist Republicans broke with GOP leadership
and joined forces with Democrats to force a vote that could come as
soon as January on a three-year extension of the tax credits. But
with the Senate already having rejected such a plan, it’s unclear
whether it could get enough momentum to pass.
Meanwhile, Americans whose premiums are skyrocketing say lawmakers
don’t understand what it’s really like to struggle to get by as
health costs ratchet up with no relief.
Many say they want the subsidies restored alongside broader reforms
to make health care more affordable for all Americans.
“Both Republicans and Democrats have been saying for years, oh, we
need to fix it. Then do it,” said Chad Bruns, a 58-year-old
Affordable Care Act enrollee in Wisconsin. “They need to get to the
root cause, and no political party ever does that.”
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