Ananya Vinesh — July 14, 2026
On December 31, 2025, the enhanced premium tax credits established under the Affordable Care Act (ACA) expired, ending one of the largest expansions of federal healthcare assistance in recent years. The expiration represents a major shift in the healthcare world, as millions of Americans who relied on these expanded credits now face rapidly rising insurance premiums. While the expiration does not eliminate the ACA itself, it alters access to medical care on an individual, communal, and political basis.
Background
Commonly known as “Obamacare,” the U.S. healthcare reform law, which passed in March of 2010, sought to expand healthcare insurance. With the federal government covering around 90% of Medicaid costs, insurance premiums became vastly cheaper, creating a larger consumer base among low-income communities. Along with the financial alleviation, several structural changes were made to insurance policies. First, protections for pre-existing conditions were established, wherein insurance companies couldn’t deny coverage due to previous health complications. Insurance companies are legally prohibited from charging higher premiums based on previous health concerns and must accept all applications for insurance. Second, health insurance marketplaces created standardized health plans where individuals and businesses could avoid being overwhelmed with complex choices. Finally and most notably, financial assistance in the form of subsidy reductions were given to qualifying households of low incomes (prior to the ACA, no federal subsidies existed for individual plans). Since companies were no longer able to deny citizens and insurance premiums were more affordable for those of lower incomes, more than 38 million Americans gained health insurance.
While ACA subsidies were originally planned to end in 2021, the COVID-19 pandemic occurred in the same year, necessitating vaccines, hospitalizations, and consistent testing. As a result, the American Rescue Plan temporarily expanded the ACA subsidies until 2025. The pandemic’s financial burden reduced, the termination of the subsidies went into motion with the Senate unable to reach a consensus on the debated two-year future extension. Furthermore, current U.S. President Donald Trump has expressed consistent opposition to the ACA, demanding a repeal in favor of his own alternative healthcare model. By reducing funding and issuing his administration to continue in multiple lawsuits, President Trump has sought to weaken various facets of the terminated subsidy system. As of July 2026, the federal government’s subsidies on premiums remain terminated.
Impacts on the Individual
Most immediately, premium prices soared to unprecedented levels, the highest in all of recorded history. Average MarketPlace prices have risen over 50% the past six months and deductibles have risen by approximately $1,000. Amid the rising prices, financial aid has been cut off for roughly 8 million individuals. At the same time, the income cap has been re-introduced, stopping at 400% above the federal poverty line and eliminating $0 benchmark plans (application of tax credits on premium coverage).
Faced with higher prices, many healthier individuals have chosen to drop health insurance altogether; nearly 3 million individuals have stopped paying for premiums. However, as the pool shrinks, a larger share of higher-cost patients who require health insurance for chronic, debilitating ailments are left behind, driving the premiums even higher. Insurance companies use a tactic known as risk pooling, spreading the financial risk of unintended loss across a larger pool; with less healthy applicants and a smaller pool, the risk increases, causing companies to continuously raise premium prices. Coined by academic literature as the “death spiral,” the smaller pool drives a cycle where rising prices make coverage less affordable and further reduce enrollment, which only causes companies to raise their prices even more.
Public Health Impacts
The increased financial burden has disproportionately impacted marginalized communities. Nearly half of all ACA marketplace users were from Black or Latinx communities. As ACA subsidies go away, lower income people of color, who already face some of the highest medical debt of any demographic, are left uninsured. Professor Moore explains that this places increased strain on the working class to further divert their money away from necessities like food and shelter to try and fit in mandatory health care checks. Lower income residents are not the only ones impacted. Elderly residents have been forced to resume work or blow through their savings to accommodate for unprecedented premium prices. ACA rules already stipulate that companies are allowed to charge elderly consumers up to 3 times more for the same plan. Alongside steep premium increases, this has increased the vulnerability of elderly populations and early retirees.
When mandatory care becomes unattainable, chronic disease progression worsens. Without insurance, patients consistently delay medical checks, blood work, and preventative screenings. More individuals start rationing medications, which worsens the impacts of their diseases. Chronically ill patients wait for medical emergencies, then flood emergency rooms. This effect overcrowds available rooms, strains the workforce, and exacerbates hospital deficits. The increase in uncompensated care will be hard for hospitals to continuously absorb in the future.
The front line is not the only healthcare aspect affected; the pharmaceutical world faces major changes in both marketing and R&D progress. Prior to the ACA expiration, pharmaceutical companies ran on a rebate system, a price negotiation ultimately aimed at selling medications to insurance companies at the cheapest price possible. With many individuals terminating their healthcare and preferring to buy cheaper alternatives, however, the market has shifted to a value-based approach, prioritizing medications that are not only the cheapest, but also have the best clinical benefit. This shift can be observed for high cost medications, such as GLP-1 plans for diabetes and obesity, which have received stricter eligibility controls and more restrictions.
An increase in individuals dropping their healthcare results in less prescription drugs remaining off the shelf. Furthermore, with only name brand prescriptions being bought as a result of tight budgets, pharmaceutical companies lose a huge portion of their customer base. By the end of 2026, it is estimated that the pharmaceutical world will face a total $5.8 billion dollar loss.
Further Political Actions
Several states have attempted to soften the impact of the expired subsidies by creating their own state-funded premium programs. These efforts, however, remain limited in comparison to federal actions as a result of smaller budgets. For example, California allocated $190 million to provide replacement assistance to the lowest income Marketplace enrollees and Massachusetts expanded its ConnectorCare program with an additional $250 million investment. The only state to fully replace its lost federal assistance was New Mexico, which dedicated $17 million toward premium and cost sharing support for residents enrolled in state exchange. While state interventions have alleviated greater coverage losses, they have also demonstrated the difficulty of fully replacing the federal program, a difference that has been felt by consumers. These state-level alternatives also give rise to a potential divide in the future, especially if states with less financial resources are unable to provide similar protections.
Current proposals for the future of ACA subsidies are still highly debated within the Senate. While both a Democrat (Sen. Peter Welch) and a Republican (Sen. Lisa Murkowski) have led the petition for renewal through 2027, many Republicans have supported an increase in health savings accounts instead. They argue that with individual control over one’s HSA account, medical dollars are no longer routed towards insurance companies. Still, a major critique of these accounts is that their coverage is limited. While they can cover things like eyeglasses and medical exams, they cannot be used to pay insurance premiums, meaning they would not serve as a complete and proper replacement for ACA subsidies.
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