On January 1, 2026, millions of Americans were hit with significantly higher health insurance premiums as enhanced subsidies under the Affordable Care Act (ACA) officially expired. These expanded tax credits, which had been introduced during the height of the COVID-19 pandemic to make healthcare more affordable for individuals and families, were allowed to lapse at the end of 2025 after congressional efforts to extend them failed. As the new year begins, many enrollees in the ACA marketplace are grappling with sticker shock, with monthly premiums in some cases more than doubling compared to what they paid last year.
The expiration of these subsidies marks a significant shift in federal health policy. Initially introduced in 2021 through pandemic relief legislation, the enhanced credits expanded eligibility and increased the amount of financial assistance available to help people buy health insurance on the ACA exchanges. They dramatically lowered costs for millions of low- and middle-income Americans and extended subsidies to people whose incomes had previously placed them above the eligibility threshold. Congress voted to extend the subsidies through 2025 as part of the Inflation Reduction Act, but lawmakers did not reach agreement on another extension before the deadline.
Now that the enhanced assistance has ended, the ACA marketplace has returned to its original subsidy structure, which provides support based on a narrower income range and at lower levels. As a result, many Americans who had come to rely on the more generous pandemic-era subsidies are now facing steep increases in the cost of their insurance premiums. Analysts estimate that some households will see their monthly payments rise by hundreds of dollars, forcing difficult decisions about whether to continue coverage.
In Connecticut and several other states, officials have reported that thousands of residents are affected by the change. Some states are attempting to fill the gap with short-term subsidies of their own, using emergency funds or leftover federal COVID relief dollars. However, these state-level efforts offer only limited support and do not match the scale of the federal enhancements. Even with these stopgap measures in place, most affected consumers will still see a substantial increase in their out-of-pocket costs for health insurance.
The broader implications of this change are significant. Health policy experts warn that higher premiums could discourage people from enrolling in coverage or prompt existing policyholders to drop their insurance altogether. This could be particularly damaging if younger, healthier individuals decide to forgo coverage, leading to an older and sicker insurance pool — a trend that would likely drive premiums even higher in the future. The ACA marketplaces rely on broad participation across age and health demographics to maintain cost stability, and any disruption in that balance can have widespread consequences.
For patients with chronic conditions, the impact is even more acute. Many people who require regular medical care or expensive prescriptions will have little choice but to maintain their coverage despite the cost increases. Others, especially those who are on the edge financially, may be forced to cut back on healthcare services or risk going uninsured. Healthcare advocates fear this could lead to delays in treatment, worsened health outcomes, and greater reliance on emergency services — all of which carry a societal and economic cost.
While the original ACA subsidy structure remains in place for some, the removal of the enhanced credits represents a rollback of one of the most significant affordability expansions in the law’s history. Many consumers had grown accustomed to lower premiums and broader eligibility over the past several years and are now expressing frustration and concern about how to manage the rising costs. Enrollment counselors and healthcare navigators across the country report a surge in confusion and distress as people review their new 2026 plan options.
The political debate around the subsidies continues to evolve. Although some members of Congress have signaled support for reintroducing the enhanced tax credits or finding an alternative solution, no clear legislative path has emerged. The divided political landscape has made it difficult to pass significant healthcare reforms, especially in the lead-up to the 2026 midterm elections. As a result, many families will be left to navigate the new landscape without further federal intervention — at least for now.
In the months ahead, data on ACA enrollment, insurance attrition, and marketplace trends will provide clearer insight into the full impact of the subsidy expiration. For now, millions of Americans are entering the new year with added financial pressure and uncertainty about how to afford the healthcare they need. The expiration of the enhanced ACA subsidies is not just a bureaucratic shift — it is a change with real, immediate consequences for people’s lives, health, and economic stability.
