About 4 million people are projected to lose Affordable Care Act marketplace coverage as the pandemic-era premium subsidies that lowered their monthly bills stay expired, the Congressional Budget Office estimates. The enhanced tax credits, introduced in 2021 and extended through 2025 by the Inflation Reduction Act, lapsed on schedule Jan. 1 after Congress failed to renew them, and the reversion has already pushed 2026 marketplace premiums sharply higher for millions of enrollees. A three-year extension passed the House in January, but it has stalled in the Senate, leaving the CBO’s projection as a warning about where the current standoff leads rather than a settled outcome.
The Subsidy Cliff Behind the Doubled Premiums
Since 2014, the ACA has capped how much of an enrollee’s income counts toward a marketplace plan’s premium, with a federal tax credit covering the difference. The enhanced version of that credit, in place since 2021, both raised the amount of assistance already-eligible enrollees received and erased the income ceiling that had cut off help entirely above 400% of the federal poverty level. That ceiling, often called the subsidy cliff, has now returned for the first time since 2021.
KFF estimates that subsidized enrollees will see their annual premium payments more than double in 2026, from an average of $888 to $1,904, a 114% increase. Part of that jump traces to a Trump administration rule that recalculated the required contribution levels enrollees owe once they lose their credit, layered on top of a median 18% rate increase insurers filed for 2026 — the largest average increase since 2018, the last time comparable federal policy uncertainty pushed premiums higher. The combination means the reversion is landing harder than the simple loss of the enhanced credit alone would suggest.
The steepest increases fall on enrollees just above the restored income cap. KFF calculates that a 60-year-old couple earning $85,000, or 402% of poverty, is projected to see premium payments climb by more than $22,600 in 2026, pushing a benchmark plan to roughly a quarter of the couple’s income. Lower-income enrollees are not exempt either: someone earning $28,000 who paid about 1% of income toward a benchmark plan now owes closer to 6%, an increase of $1,238 a year.
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A House-Passed Fix Stalled in the Senate
The House passed a three-year extension of the enhanced credits on Jan. 8 by a 230-196 vote, with 17 Republicans joining Democrats over the objection of GOP leadership. The bill followed a December vote in which Senate Republicans blocked an earlier Democratic-led extension, 51-48, eight votes short of the 60 needed to advance. Senate Majority Leader John Thune said at the time there was no appetite in the chamber for reviving the credits, and no vote on the House-passed bill, or any alternative, had occurred as of late August.
The stalemate falls hardest on people who buy coverage directly on the marketplace rather than through an employer, a group that skews older than the workforce overall and includes early retirees who are not yet eligible for Medicare at 65. Roughly one in ten marketplace enrollees have incomes above 400% of poverty, the income band a Congressional Research Service analysis identifies as hit hardest by the restored subsidy cliff, and self-employed workers and retirees drawing down savings are overrepresented in that group because they typically have no employer plan to fall back on.
What the CBO’s Coverage-Loss Estimate Actually Measures
The 4 million figure attached to the debate comes from a Congressional Budget Office projection that letting the enhanced credits lapse permanently would leave an average of 3.8 million more people uninsured each year from 2026 through 2034, a number researchers commonly round up. That is a decade-long average, not a single-year head count, and it grows over time as more enrollees drop coverage they can no longer afford rather than as an immediate mass exit in early 2026.
Marketplace enrollment more than doubled after the enhanced credits took effect in 2021, climbing from about 11 million people to more than 24 million, with the vast majority receiving some form of premium assistance. The Urban Institute has separately projected 4.8 million more people uninsured in 2026 specifically, a higher near-term figure than the CBO’s multiyear average, reflecting how much of the recent enrollment growth was concentrated among people now facing the full loss of their subsidy.
KFF researchers who track the marketplace have cautioned that there is no single drop-dead date for the extension fight: coverage losses accumulate gradually as each open-enrollment window closes, rather than in one nationwide moment. That timeline matters most for near-retirees living on a mix of savings and part-time income, who typically re-shop plans each fall and are the ones deciding, right now, whether to keep marketplace coverage at the new price or go without insurance until Medicare eligibility arrives.
For older adults who buy marketplace coverage while waiting out the years before Medicare eligibility, the practical question is no longer whether the enhanced credits will return before open enrollment closes but whether the House-passed extension gets a Senate vote at all before its own window closes. Congress returns from recess in mid-September with a Sept. 30 government funding deadline colliding with the health care fight, and the CBO’s coverage-loss estimate is best read as the running cost of that impasse rather than a hypothetical scenario Congress can still avoid entirely.
This article was researched and drafted with the assistance of artificial intelligence.
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