Why Expiring ACA Healthcare Subsidies Are Increasing Insurance in 2026

Health insurance just got a lot more expensive. As of January 1, 2026, enhanced Affordable Care Act (ACA) subsidies are gone. That single change is already hitting household budgets hard, and many families did not see it coming.

These subsidies helped millions afford coverage during years of rising medical costs. Without them, premiums are rising back to levels that many people cannot afford. The timing could not be worse, with inflation still squeezing wallets and healthcare costs climbing faster than paychecks.

An Increase in Medical Bills

Matt / Pexels / The enhanced subsidies started in 2021 during the pandemic. They capped how much of your income you had to spend on insurance, even if you earned more than traditional subsidy limits.

That cap is now gone!

Here is what that means: Someone earning $28,000 paid about $325 a year for a benchmark plan. In 2026, that same plan costs about $1,562. That jump is not a fluke. According to KFF, average annual premiums for subsidized enrollees are rising 114%, from $888 in 2025 to $1,904 in 2026.

Stories from across the country show even sharper spikes. A social worker saw her monthly bill soar from $85 to nearly $750. One family watched their premium jump from $630 to $2,400 a month. A freelance filmmaker now pays $500 instead of $350. These increases land overnight, with no gradual ramp and no safety net.

Rising Medical Costs Add Fuel to the Fire

The subsidy cliff is only part of the problem. Insurers are also raising base rates at levels not seen since 2018. Across 312 insurers, the median proposed increase for 2026 is 18%. The average sits closer to 20%.

Insurers blame higher hospital prices, staff shortages, and stubborn inflation. Doctors and nurses cost more. Hospitals charge more. Insurers pass those costs straight to consumers. Prescription drugs also play a huge role, especially GLP-1 medications for diabetes and weight loss, plus high-priced biologics and gene therapies that can cost tens of thousands per year.

When subsidies shrink and premiums rise simultaneously, the math becomes brutal. People who once paid manageable monthly amounts now face bills that rival rent or car payments. For many households, insurance becomes the first expense to cut.

Coverage Losses Could Snowball

Pran / Pexels / A projection from the Urban Institute and the Commonwealth Fund estimates that 4.8 million people could leave ACA marketplaces in 2026 alone.

Younger and healthier people are most likely to walk away. That leaves a risk pool packed with older and sicker enrollees. When that happens, premiums rise even more. It becomes a feedback loop that punishes anyone left behind.

This comes on top of looming Medicaid cuts. Combined, analysts warn these policies could push up to 16 million Americans into the uninsured category by 2034. That would erase most of the coverage gains made since the ACA became law.

However, Congress was aware that this deadline was approaching. Lawmakers still failed to act. The fight over funding triggered a 43-day government shutdown in late 2025, one of the longest in history.

Democrats pushed a three-year subsidy extension. Republicans countered with a plan focused on health savings accounts and neither passed. Congress adjourned in December without a deal, leaving millions exposed to full-price premiums starting in January.

There is still a slim chance for action. In the House, four centrist Republicans joined Democrats to force a discharge petition. That move could bring a three-year extension to a vote in early 2026. Even if it passes, the Senate has already rejected similar legislation, making the outcome uncertain at best.

There is limited time to soften the blow. In most states, open enrollment runs through January 15. Anyone affected should log back into their marketplace account and compare plans again.