mericans’ health insurance premiums are on track to surge next year, due to the imminent expiration of enhanced Affordable Care Act (ACA) tax credits introduced in response to the COVID-19 pandemic.

According to a recent analysis by the Peterson Center on Healthcare and KFF, two health care-focused non nonprofits, out-of-pocket premium payments for ACA Marketplace enrollees are projected to increase by over 75 percent on average. Other state-level analyses have projected even greater increases.

“The [advance premium tax credit] cuts are certainly the biggest threat to health care costs and health coverage eligibility at the moment,” said Timothy Jost, Professor Emeritus at the Washington and Lee University School of Law.
The enhanced subsidies have increased the affordability of coverage for millions. Experts tell Newsweek that that their expiry could lead to major financial strain for households already grappling with tight budgets, with some potentially dropping coverage altogether. As healthier enrollees leave the market, they warn that this could result in further premium hikes.

The enhanced premium tax credits were an element of the American Rescue Plan Act, signed into law by President Joe Biden in early 2021. Among other things, these increased the amount of financial assistance available to those purchasing insurance through ACA Marketplaces, reducing the percentage of income individuals had to pay for premiums.

Originally intended as a temporary measure, these were extended through 2025 by the Inflation Reduction Act of 2022, and have been credited with ACA Marketplace enrolment more than doubling to 24.3 million from 11.4 million between 2020 and 2025.

However, the subsidies are scheduled to lapse at the end of this year, though concerns over the impact of this have put pressure on Republicans as Congress attempts to negotiate a comprehensive spending plan for the 2026 fiscal year.
In addition to forecasts of a nationwide 75-percent increase in premium prices, some states are projecting even steeper hikes.