Enhanced premium tax credits (ePTCs), first introduced as part of the American Rescue Plan act in 2021, have made ACA Marketplace coverage more affordable for the millions of enrollees that receive them. Enhanced tax credits have lowered the share of household income ACA Marketplace enrollees are expected to contribute out-of-pocket toward the premium payment for a benchmark silver plan. For those already eligible for premium subsidies, ePTCs have increased the total amount of tax credits the enrollee receives, while middle-income enrollees making above 400% of poverty ($62,600 for an individual enrolled in coverage for plan year 2026) have become newly eligible for the tax credits. The ePTCs were extended until the end of 2025 by the inflation Reduction Act.
this data note compares how the out-of-pocket portion of premiums would differ if the ePTCs expire, or become extended, for select scenarios. (To produce your own estimate of how premium payments would differ compared to if the enhanced tax credits become unavailable, KFF provides an interactive tool where users are able to input their desired geography, income, and family size).
If enhanced premium tax credits expire, subsidized ACA Marketplace enrollees can expect their out-of-pocket premium payments to rise substantially. Such as, a 27-year-old making $35,000 (224% of poverty) would pay $1,033 annually for a benchmark silver plan in 2026 with the ePTCs. Without the enhanced tax credits, though, they will pay $2,615 – a $1,582 (153%) increase.
With the enhanced tax credits in place, Marketplace enrollees making between 100%-150% of the federal poverty level are eligible for a fully subsidized benchmark plan. Prior to the availability of the ePTCs, enrollees making just above the poverty level were expected to contribute about 2% of their household income towards a benchmark plan. If the enhanced tax credits expire, low-income enrollees who are currently paying $0 for a benchmark plan will have to start paying for coverage again. For example, a 35-year-old couple earning $30,000 can expect to start paying $1,107 annually for a Marketplace benchmark plan.
What happens if premiums rise substantially in 2026?
There are two ways of thinking about premiums in the ACA Marketplaces. first, there is the net premium, which is what the enrollee pays out-of-pocket after taking into account their tax credit. Second, there is the gross premium, which is the amount the insurance company charges (part of which is paid by the federal government and part of which is paid by the enrollee). The expiration of the enhanced premium tax credits will affect the net premium directly (as enrollees receive less financial assistance) and it will also indirectly affect the gross premium insurers charge.
A KFF Analysis of rates (gross premiums) proposed by Marketplace insurers for the 2026 plan year found that insurers are requesting a median increase of 18% in their rates. Insurers cited several reasons for these rate increases, including that they anticipate that some healthier members will leave the ACA Marketplaces.
The Future of ACA Premiums: How expiring Tax Credits and Regulatory Changes Coudl Impact Costs
The Affordable Care Act (ACA) Marketplace has provided subsidized health insurance to millions of Americans. However, the expiration of enhanced premium tax credits (ePTCs) and recent regulatory changes could substantially increase out-of-pocket costs for many enrollees. This analysis examines the potential impact of these changes on premium payments, drawing on data from the Kaiser Family Foundation (KFF) and the Internal Revenue Service (IRS).
Impact of Expiring Enhanced Premium Tax Credits
The Inflation Reduction Act (IRA) temporarily extended enhanced premium tax credits, making health insurance more affordable for a wider range of income levels. Though, these credits are set to expire, perhaps leading to ample premium increases.
For a 55-year-old couple, net premium payments – the amount paid after tax credits – could more than triple if ePTCs expire, rising by $17,310 (a 240% increase) from $7,225 to $24,535 annually, assuming premiums remain constant. Even with an anticipated 18% growth in gross premiums by 2026, the impact remains significant.
How Trump Administration Regulations Factor In
The maximum amount households are required to contribute towards a benchmark ACA Marketplace plan is adjusted annually to reflect changes in premiums relative to income. The introduction of ePTCs led to new,more generous contribution levels that were not subject to annual adjustments.
Recent changes introduced by the Trump administration through the Marketplace Integrity and Affordability rule have altered the calculation of these required contributions. Specifically, the maximum out-of-pocket contribution for benchmark premiums, as a share of income, has increased for those receiving premium tax credits compared to previous indexing methodologies. The IRS has released the required contributions for 2026 reflecting these changes.
Projected Premium Increases
Without the enhanced tax credits, subsidized enrollees could face significantly higher premiums. prior estimates from 2024 indicated out-of-pocket payments would be over 75% higher without the IRA’s enhanced subsidies. These costs are expected to rise further in 2026 due to both annual premium increases and the IRS changes to contribution requirements.
Methodology
The KFF analysis used 2025 premium data, as 2026 rates were not yet finalized at the time of the report. This data was sourced from the Centers for Medicare & Medicaid Services (CMS), insurer rate filings, and direct information gathered from state exchanges and insurance departments.To isolate the impact of removing enhanced tax credits, the maximum required contribution was calculated using the 2025 federal poverty threshold, comparing the applicable percentage under the IRA to the expected percentage for 2026. A further 18% increase was applied to the 2026 scenario to account for anticipated premium growth.