Introduction to the Expiring ACA Subsidies

The U.S. Capitol in Washington, Dec. 8, 2025.

Graeme Sloan/Bloomberg via Getty Images

It’s a near certainty that enhanced subsidies for health insurance purchased on the Affordable Care Act marketplace will expire at year’s end amid political gridlock — and some consumers are poised to be hit especially hard by the loss.

The expiration of the enhanced subsidies would raise insurance premiums for roughly 22 million recipients, or about 92% of ACA marketplace enrollees.

KFF, a nonpartisan health policy research group, estimates the average recipient would see their premiums more than double in 2026 if the subsidies disappear.

Most Affected Groups by the Expiring Subsidies

Certain people — including early retirees, small-business owners, middle-income consumers, Black and Latino households, and residents of many states that voted for President Donald Trump in 2024 — would be more financially exposed to a subsidy lapse, according to health experts.

“Then it’s a question of who’s in those groups: Who are the most vulnerable?” said Nick Fabrizio, a health policy expert and associate teaching professor at Cornell University’s Jeb E. Brooks School of Public Policy.

There’s a chance Congress may act to extend the subsidies early next year.

Earlier this month, a handful of Republicans in the House of Representatives broke ranks to join with Democrats and force a vote in the chamber in January on extending the subsidies.

“It’s virtually guaranteed at this point the subsidies will expire” at the end of 2025, said Emma Wager, a senior policy analyst at KFF who specializes in the Affordable Care Act. “What happens [in Congress] in January remains to be seen.”

ACA Subsidy Cliff and Its Impact on Middle-Income Households

ACA subsidies, also known as premium tax credits, have been available since 2014.

Congress offered a temporary enhancement to those subsidies in 2021 as part of a Covid-19 relief package. The next year, lawmakers extended the enhanced subsidies through 2025.

The enhanced subsidies both boosted the value of the premium tax credit and made it available to more households.

The policy also capped the amount that households pay out of pocket for health insurance premiums at 8.5% of their annual income, down from almost 10% before the enhanced subsidies took effect.

Further, the enhancement eliminated the so-called “subsidy cliff.”

Previously, households with an income exceeding 400% of the federal poverty level — more than roughly $63,000 for an individual and $129,000 for a family of four in 2025 — were ineligible for any premium subsidies.

Impact on Early Retirees and Small Businesses

Many older adults who retire before they’re eligible for Medicare at age 65 buy health insurance on the ACA marketplace.

In 2025, about 24% of ACA enrollees were at least 55 years old, according to the Bipartisan Policy Center analysis.

Insurance premiums increase significantly with age, experts said. Insurers are allowed to charge older adults more than younger consumers, and often do because older people tend to use more health care, experts said.

Nearly half — 48% — of all adults under age 65 enrolled in a marketplace health plan are self-employed entrepreneurs, small business owners or are employed by a small business with fewer than 25 workers, according to KFF.

States Most Affected by the Expiring Subsidies

Experts credit the enhanced subsidies for most of the tremendous growth in ACA enrollment seen in recent years.

ACA enrollment has more than doubled since 2020, from roughly 11 million to a record-high 24 million in 2025, according to a KFF analysis of federal data.

Most of that enrollment boost came in states Trump won in the 2024 election.

ACA enrollees in Florida received $31.7 billion of premium tax credits in 2025, the highest state tally, while enrollees in Texas got $24.1 billion, the second-highest state total, according to KFF estimates.

Disproportionate Impact on Black and Latino Consumers

If enhanced subsidies expire, certain groups with a higher uninsurance risk, including Black and Latino consumers, will be disproportionately impacted, according to the Bipartisan Policy Center.

The share of total consumers enrolled in an ACA marketplace health plan increased to 22% in 2025 among Hispanics/Latinos, up from 18% in 2020, according to BPC, citing federal data.

While they account for a relatively small share of ACA enrollees relative to white consumers, who accounted for 52% of total enrollees in 2025, “recent coverage gains could be lost if the enhanced [subsidies] expire,” according to BPC.

Smart Tip for Readers

To prepare for potential changes to ACA subsidies, individuals can review their current health insurance coverage and explore available options, considering factors such as income, family size, and health care needs, and visit Here for more information.