The extra financial help that had kept Affordable Care Act marketplace premiums artificially flat for four straight years disappeared at the end of 2025, and subsidized enrollees are now the ones covering the gap. KFF, the nonpartisan health policy research organization, estimated that the average annual premium payment for a subsidized marketplace enrollee who kept the same plan would climb from $888 in 2025 to $1,904 in 2026, an increase of roughly $1,016. The jump falls hardest on people in their fifties and early sixties who buy coverage on their own while counting down to Medicare eligibility. Enrollment data collected since January now confirms the credits are gone, not paused.
How the $888-to-$1,904 Estimate Was Built
Enhanced premium tax credits were never a permanent fixture of the Affordable Care Act marketplace. Congress created the enhancement through the American Rescue Plan in 2021, then extended it through the end of 2025 in the Inflation Reduction Act, lowering the share of income that subsidized enrollees had to put toward a benchmark plan on a sliding scale tied to household earnings. That extension held the average annual premium payment among subsidized enrollees flat at $888 in both 2024 and 2025, even as underlying premiums kept climbing, because the credits absorbed nearly all of the increase on the government’s side of the ledger.
KFF analysts Justin Lo, Larry Levitt, Jared Ortaliza and Cynthia Cox modeled what would happen once that cushion disappeared, using 2024 and 2025 federal Open Enrollment data alongside the new 2026 required-contribution levels the Trump administration finalized in its ACA Marketplace Integrity and Affordability rule. Their calculation found that if subsidized enrollees kept the exact same plan, the average annual premium payment among that group would rise 114 percent, climbing from $888 in 2025 to $1,904 in 2026, driven partly by the credits’ expiration and partly by insurers raising 2026 rates by a median of 18 percent.
The scale of that increase varies enormously by income and age, but KFF’s modeling of a hypothetical 45-year-old earning $28,000 illustrates the mechanism: with the enhanced credit, that person’s required contribution toward a benchmark plan was capped near 1 percent of income, or about $325 a year; without it, the required contribution jumps to nearly 6 percent of income, or about $1,562 a year, a $1,238 increase for a single enrollee well below the income level that triggers the very steepest hikes.
Where the help is written down: The programs that lower Medicare costs each run on a different form and a different office, and no single notice lists them together. See the state cost-help packs in The Medicare Cost & Coverage Protection Kit.
The 50-to-64 Age Group Absorbs the Steepest Hikes
The people facing the largest dollar increases are not evenly distributed across the marketplace. Enrollees earning above 400 percent of the federal poverty level, roughly $63,000 for an individual or $129,000 for a family of four, lose eligibility for any premium tax credit once the enhancement expires, going from a capped contribution to paying the full sticker price of their plan. The Center on Budget and Policy Priorities reports that more than half of the enrollees above that income threshold are adults between the ages of 50 and 64, the stretch of working years when people are most likely to buy coverage on their own rather than through an employer and least likely to qualify for Medicare.
That concentration matters because older enrollees pay more for the same plan regardless of subsidy status. Federal rating rules allow marketplace insurers to charge a 64-year-old up to three times what they charge a 21-year-old for identical coverage, so the same percentage-point loss of a tax credit translates into a far larger dollar figure for someone in their sixties than for someone in their twenties. A person in this age group who loses a fully applied credit is not just losing a discount; that person is exposed to the full width of the age-based premium multiplier at the same moment the credit disappears.
For many enrollees in this bracket, the math resembles the example KFF used to illustrate the scale of the change: a 60-year-old couple earning $85,000, just above the subsidy cliff, would see yearly premium payments climb by roughly $22,600 once the enhanced credit is gone and 2026 rate increases are layered on top, pushing what the couple owes toward a quarter of household income. Enrollees at that income and age combination are frequently people who retired early, left a job that carried health benefits, or became self-employed in their fifties and now have no employer plan to fall back on before Medicare begins at 65.
The Actual 2026 Numbers Are Coming In Lower, and Worse
KFF’s original estimate assumed enrollees would keep their existing plan, but real-world enrollment data collected through the first months of 2026 tell a messier story. A follow-up KFF analysis by Matt McGough, Jared Ortaliza, Justin Lo and Cynthia Cox, published after the credits actually lapsed, found that the average monthly premium payment across all marketplace consumers rose 58 percent, from $113 to $178, a smaller jump than the 114 percent projected for subsidized enrollees who stayed in place.
The lower realized number is not the good news it looks like. KFF’s researchers attribute the gap to two behaviors: many enrollees who kept coverage switched into cheaper bronze plans with far higher deductibles, and enrollees just above the subsidy cliff, who faced the steepest increases, dropped marketplace coverage entirely at a disproportionate rate. People earning between 400 and 500 percent of the federal poverty level made up just 3 percent of 2025 sign-ups but accounted for 27 percent of the total drop in enrollment heading into 2026, and the average marketplace deductible jumped 37 percent to a record $3,786 as more people shifted into skimpier plans to keep premiums affordable.
Insurers do not expect the pressure to ease. In preliminary 2027 rate filings covering all 50 states and the District of Columbia, insurers proposed a median premium increase of 15 percent, citing the tax credits’ expiration and a sicker remaining risk pool as contributing factors alongside rising medical costs, layered on top of the median 18 percent increase already built into 2026 rates.
None of that offsets the credits’ expiration; it just spreads the cost differently, trading a smaller premium increase for a bigger deductible and a shrinking pool of insured people. KFF’s May 2026 analysis confirms that when the American Rescue Plan-era enhancements expired at the end of 2025 without a congressional extension, total effectuated marketplace enrollment was on track to fall from 22.3 million people in 2025 to somewhere between 16.5 million and 17.5 million people in 2026, the sharpest single-year drop the marketplace has recorded since it launched in 2014.
Where Coverage Costs Get Negotiated Down
The enrollees absorbing the steepest 2026 premium increases are disproportionately in their fifties and early sixties, the stretch of years spent buying coverage on the open market while counting down to Medicare eligibility at 65. Medicare solves the coverage question but not the cost question: enrollees still face separate premiums, a Part D drug benefit, and a set of assistance programs that run through different state offices with no shared notice explaining which ones apply. The paperwork gap that just made marketplace subsidies confusing to navigate carries straight over into Medicare enrollment.
The Medicare Cost & Coverage Protection Kit is a 10-page kit built around 51 state Medicare cost-help packs and the new Part D out-of-pocket cap, with the prior-authorization appeal steps and a medication and cost tracker included.
Look up the Part D out-of-pocket cap and appeal steps inside The Medicare Cost & Coverage Protection Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
