More than 20 million people across the US are facing a steep rise in health insurance costs as of January 1, 2026, following the expiration of enhanced tax credits that helped enrollees in the Affordable Care Act, commonly known as Obamacare, afford coverage.
The subsidies, which were originally introduced in 2021 to assist Americans during the COVID-19 pandemic and later extended, expired overnight. The loss of this financial aid cements significantly higher costs for millions at the start of the new year, primarily affecting families, small business owners, and self-employed workers who do not receive insurance through an employer or qualify for government programs like Medicare or Medicaid.
According to an analysis by the health care research nonprofit KFF, subsidized enrollees in the Affordable Care Act (ACA) program will see their premium costs rise by an average of 114% in 2026.
The rise in US health insurance costs follows months of political battles
The expiration follows months of legislative battles in Washington. Democrats forced a 43-day government shutdown over the issue, demanding an extension of the health subsidies before agreeing to a new Republican budget.
In December, the GOP-controlled Senate rejected two partisan health care bills, a Democratic proposal to extend the subsidies for three more years, and a Republican alternative that offered health savings accounts instead.
While four centrist Republicans in the House broke with leadership to force a vote on a three-year extension, potentially scheduled for January, success remains uncertain given the Senate’s prior rejection.
4.8 million Americans could drop health coverage in 2026
Health analysts predict that the sharp increase in premiums will drive many of the 24 million total ACA enrollees to forgo coverage entirely. An analysis conducted last September by the Urban Institute and Commonwealth Fund projected that 4.8 million Americans could drop coverage in 2026 due to the expiring subsidies.
Experts warn that if younger and healthier Americans leave the insurance pool, the program could become increasingly expensive for the older and sicker population that remains. Stan Clawson, a 49-year-old freelance filmmaker from Salt Lake City, said his premiums will rise from just under $350 a month to nearly $500. Living with paralysis from a spinal cord injury, Clawson told the AP he is willing to absorb the cost because coverage is essential, though he acknowledged it is a financial strain.
With the open enrollment window still active until January 15 in most states, the final impact on enrollment numbers remains to be determined. “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 ACA enrollee in Wisconsin, according to reporting from the AP. “They need to get to the root cause, and no political party ever does that.”
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