How the Loss of ACA Premium Tax Credits Could Shake Up 2026 Health Plans

If you're one of the 24 million Americans getting health insurance through the ACA marketplace, you need to pay attention. A major change is coming that could more than double your monthly premium payments starting January 1, 2026.

The enhanced premium tax credits that have been helping millions afford health insurance since 2021 are set to expire on December 31, 2025. Unless Congress acts to extend them, we're looking at the biggest shake-up in the health insurance market since the ACA launched.
Let me break down exactly what this means for you and your family.

What Are Enhanced Premium Tax Credits?

Think of premium tax credits as the government's way of helping you afford health insurance. The original ACA included these credits, but they were pretty limited. Then in 2021, Congress supercharged them with what we call "enhanced" credits.

These enhanced credits did two big things:

• Made existing help more generous (bigger subsidies)
• Extended help to middle-income families who previously got nothing

Before 2021, if you made more than about $51,000 as an individual (or roughly $105,000 for a family of four), you got zero help with premiums. The enhanced credits changed that, capping what anyone pays at 8.5% of their income, no matter how much they earn.

The Numbers Don't Lie: Premium Shock Is Coming

Here's where things get scary. Without these enhanced credits, the average person currently getting help will see their monthly premium payments jump by more than 136%.

Let's put that in real dollars. Say you're making $28,000 a year and currently paying about $27 per month for health insurance. When these credits expire, you'll be looking at around $130 per month – nearly five times more.

For someone making $35,000 annually, their premium could jump from manageable to over $85 per month for basic coverage. And if you're one of those middle-income earners who currently gets some help but would lose it entirely? You could be looking at paying the full premium – potentially $400-600 per month or more.

Why Insurers Are Raising Rates Even Higher

Insurance companies aren't just sitting back and watching this happen. They're already planning for the chaos, and their solution is raising rates across the board.

The median rate increase insurers are requesting for 2026? A whopping 18% – the biggest jump we've seen since 2018. Here's their logic: when premiums get too expensive, healthy people drop coverage first. That leaves insurance companies with a sicker, more expensive pool of customers, so they have to raise rates even more to cover costs.
It's a vicious cycle, and we're all caught in the middle.

Who Gets Hit the Hardest?

The people who will feel this the most are middle-income families – those making too much to qualify for Medicaid but not enough to easily afford full-price health insurance.

If you're single and making between $30,000-$60,000 a year, or you're a family of four earning $60,000-$120,000, you're in the danger zone. You might lose your tax credits entirely or see them cut dramatically.

But here's the thing – even people who keep some assistance will still pay way more. The enhanced credits were designed to make sure no one paid more than a certain percentage of their income for health insurance. Without them, that protection disappears for many.

The Coverage Crisis: 4.8 Million People Could Lose Insurance

Experts predict that nearly 5 million Americans will drop their health insurance in 2026 because they simply can't afford the higher premiums. That's like the entire population of South Carolina going without coverage.

This isn't just about money – it's about health. When people lose insurance, they skip preventive care, delay treatment for chronic conditions, and end up in emergency rooms for problems that could have been caught early.

More Bad News: Additional Policy Changes

As if losing the enhanced credits wasn't enough, other policy changes are making things worse. The July 4 Tax Act added several new hurdles:

• If you get too much advance credit during the year (because your income was higher than expected), you might have to pay back more than you can afford
• Special enrollment periods are being eliminated for certain situations
• Some low-income individuals are losing access to special programs

These changes create even more barriers for people trying to get and keep health insurance.

What This Means for Your 2026 Planning

If you're currently getting ACA marketplace coverage, here's what you need to do:

Start budgeting now. Look at your current premium and multiply it by at least 2.5. That's probably closer to what you'll pay next year without enhanced credits.

Consider your options. You might need to:

• Choose a plan with higher deductibles to keep premiums lower
• Look into employer coverage if it's available
• Explore short-term plans (though these offer limited protection)

Don't wait until open enrollment. The marketplace will be chaotic in late 2025 as millions of people scramble to find affordable coverage.

The Insurance Company Perspective

From where we sit at VitalShield, we're watching this situation closely. Insurance companies are essentially caught between a rock and a hard place. They need to price their plans assuming many people will drop coverage, but they also need to remain competitive.

Some insurers might leave certain markets entirely if they can't make the numbers work. Others might offer more bare-bones plans to keep premiums as low as possible. Either way, your choices in 2026 will likely be different – and more expensive – than what you have today.

What Happens Next?

The big question is whether Congress will step in before December 31, 2025, to extend these credits. It's happened before – they were originally set to expire in 2022 but got extended through the Inflation Reduction Act.

But here's the reality: even if Congress acts, it might not be until the last minute. And any extension might be temporary or less generous than what we have Preparing for Change

Whether you're currently on an ACA plan or thinking about your options, now is the time to get informed. The health insurance landscape is about to change dramatically, and the more you understand about your options, the better prepared you'll be.

At VitalShield, we're here to help you navigate these changes. We'll keep monitoring the situation and help you find the best coverage for your situation and budget, whatever happens with these policy changes.

The loss of enhanced premium tax credits represents the biggest disruption to individual health insurance markets since the ACA launched. While we can't control federal policy, we can help you understand your options and make the best decisions for your family's health and financial security.

The key is staying informed and planning ahead. Don't wait until January 2026 to figure out what you're going to do – start preparing now.