The much-debated deadline for the enhanced premium tax subsidies under the Affordable Care Act (ACA) has come and gone, leaving millions of Americans bracing for impact. Despite numerous attempts at bipartisan negotiation, Congress was unable to reach a consensus to extend these benefits.

These subsidies, initially introduced during the COVID-19 pandemic under President Biden and later prolonged through the Inflation Reduction Act, were set to expire by December 31, 2025. This date marked the last opportunity for lawmakers to secure a deal that would maintain the financial assistance crucial to many Americans.

In the latter part of 2025, Democrats remained largely unified, applying pressure on their Republican counterparts to agree on a resolution that could preserve the subsidies. This effort unfolded amidst the longest government shutdown in U.S. history, highlighting the internal conflict within the GOP. Conservatives remained firm in their opposition to ObamaCare, while moderates faced the challenge of managing voter dissatisfaction.

By December 19, as Congress adjourned for the holiday recess, Republicans had yet to broker an agreement, setting the stage for renewed debates as the new year unfolds.

Health policy experts have consistently cautioned that the cessation of these enhanced tax credits would lead to dramatically increased premiums, potentially leaving millions of Americans without affordable health insurance options through the ACA marketplace.

The deadline to receive coverage at the start of 2026 was Dec. 15. Prospective enrollees have until Jan. 15 to sign up if they want coverage beginning on Feb. 1. 

Subsidies drove record enrollment

The enhanced premium tax credits were credited with boosting health insurance coverage in the U.S. The Biden administration saw four consecutive years of record-high enrollment in ACA plans, with nearly 24 million people signed up for plans in 2025. 

Much of this was due to the enhanced premiums tax credits lowering monthly health plan costs for millions, with many being able to get $0 plans. And eligibility for enhanced premiums tax credits was expanded to include people making beyond 400 percent of the federal poverty level.

Now, without the policies that boosted coverage and allowed customers to access more affordable plans, uninsured rates are expected to grow this year, even if a deal is struck when Congress returns this month. 

Young people will see the greatest rise in uninsurance rates compared to other age groups, according to Matthew Buettgens, senior fellow in the health policy division at the Urban Institute.

Among racial groups, Black, non-Hispanic people are projected to see the largest increase in uninsurance rates, with white, non-Hispanic people following closely behind at 25 percent. 

Across the income spectrum, people making between 250 percent and 400 percent of the federal poverty level —  those who fall in the middle of the eligible population — will see the largest percent gain in uninsurance, projected at 26 percent.  

Premium spikes, coverage losses

With the future of the enhanced tax credits uncertain, health insurers advertised plans with the assumption that credits would not be extended, leaving many customers with sticker shock when it came time for open enrollment. 

The cost of ACA premiums is expected to rise by 26 percent on average, lower in states that run their own marketplaces and higher in those that use Healthcare.gov. 

The health policy nonprofit KFF projects annual premium payments for enrollees would more than double, rising by 114 percent on average, or $1,016. 

Experts estimate somewhere between 2.2 million and 7.3 million people will decide against renewing their insurance due to the price hike. 

In California, new sign-ups fell by 32 percent. In Massachusetts, about 13,000 people opted out 2026 coverage. About 200,000 Mississippians are expected to drop ACA coverage for 2026. 

Just as the impact will fall unevenly across age, incomes and race, the premium spikes are expected to be felt disproportionately across states. 

KFF projects Arkansas will see the highest percent increase at 69 percent for its benchmark plan, the second-lowest-cost Silver plan. Washington is expected to see the second-highest premium increase at 41 percent, followed by Tennessee and Mississippi. Alaska, Vermont, New York and D.C. are among the states expected to see the lowest premium spikes in 2026. 

What comes next?

Though it blew past the crucial New Year’s deadline, Congress can still reverse some of the expected cost increases when it comes back from break.

Just before leaving for holiday recess, House Speaker Mike Johnson (R-La.) sided with opponents of extending the COVID-era tax credits. 

However, four House Republicans joined Democrats in signing a discharge petition to force a floor vote to extend the subsidies for three years. It will likely pass in the House but not the Senate, at least in its current form. Republicans want additional enrollment restrictions, such as income caps and a requirement that recipients make minimum premium payments.  

While reopening the marketplace will be costly and complicated,l state health plan leaders say they are prepared to make whatever Congress passes work. 

The enhanced premium tax credits were initially passed in March 2021, in the middle of the plan year and state leaders say they’re “ready to move mountains” to accommodate an extension. 

“We stand ready to move mountains, if needed, to make sure that Idahoans receive all the savings that they’re eligible for,” Pat Kelly, executive director of Your Health Idaho, told The Hill prior to the extension deadline. 

Jessica Altman, executive director of Covered California, a state-based marketplace for ACA coverage, said a clean extension would be a best-case scenario, though even that would be difficult to retroactively enact. 

“Even a clean extension of the enhanced premium tax credits takes reloading everything in the system, resending notices to all the consumers, giving people time to come in and shop and change their plans … even that you’re talking about weeks, if not a month or longer,” said  Altman.