FAQ: The uncertain future of enhanced ACA premium subsidies and what it means for U.S. healthcare

Open enrollment for Affordable Care Act (ACA) marketplace plans ended January 15 in most states, according to CMS. This close of enrollment comes as Congress continues to debate whether to extend enhanced ACA premium tax credits that expired at the end of 2025.

Enrollment in ACA plans reached 24 million in 2025, partly because of the enhanced premium credits. Although the fate of the enhanced premium tax credits has garnered the most attention, the Trump administration has taken other steps that would decrease ACA enrollment. It issued a rule in June 2025 that would have reduced ACA enrollment by an estimated 1.8 million. Lawsuits have kept some of the major aspects of that rule from going into effect. The One Big Beautiful Bill Act that President Donald Trump signed into law on July 4, 2025, also has provisions that are expected to curtail enrollment in ACA plans. Not all of them go into effect this year.

ACA premiums and enrollment rules affect people in the individual market most directly because they have depended on the ACA for health insurance coverage. But the ACA subsidies and related issues have ripple effects on the provider finances, government spending and, ultimately, public health. This FAQ focuses on the policy and system questions facing lawmakers, payers, providers and regulators.

When did the enhanced ACA subsidies begin, and why were they created?

Enhanced ACA premium tax credits were first enacted in 2021 through the American Rescue Plan Act. The policy expanded eligibility for financial assistance above 400% of the federal poverty level and lowered the percentage of income enrollees were required to pay toward premiums.

The goal was to improve affordability, increase Marketplace enrollment and stabilize coverage during the COVID-19 pandemic. Congress later extended the subsidies through the end of 2025, allowing them to become a core feature of ACA Marketplace pricing rather than a temporary adjustment.

How many people rely on enhanced ACA subsidies?

According to a KFF analysis, most ACA Marketplace enrollees receive premium tax credits, and a substantial share benefit specifically from the enhanced subsidies enacted after 2021. Middle-income enrollees, who were previously ineligible for assistance, represent a significant portion of those affected.

Because of this, the subsidies now affect who signs up and how much they pay, meaning the expiration could affect everyone in the marketplace, not just a few people.

What happens to premiums if enhanced subsidies are not extended?

KFF estimates indicate that without enhanced subsidies, many enrollees could face premium increases ranging from hundreds to thousands of dollars per year, depending on age, income, and geography. Older adults and people just above traditional subsidy levels would see the steepest increases.

Higher premiums could lead some enrollees to switch to less generous plans, while others may drop coverage altogether. Over time, these shifts could contribute to declining enrollment and worsening risk pools, potentially placing additional upward pressure on premiums in future years.

How many people could become uninsured?

Millions of people could lose ACA coverage if enhanced subsidies are not extended. Coverage losses would likely be concentrated among middle-income enrollees and older adults, groups that have historically faced higher premium costs, according to the KFF analysis.

A reduction in coverage at this level could increase delayed care and uncompensated care, particularly affecting providers that serve high ACA enrollment areas and safety-net populations.

Does extending subsidies reopen ACA enrollment?

No. Enrollment rules and subsidy policy operate separately under the ACA. Even if Congress extends enhanced premium tax credits, that action alone would not reopen open enrollment or create new opportunities to sign up outside existing rules.

Therefore, a late subsidy extension would likely benefit those who are already enrolled, improving affordability without significantly reducing the number of uninsured individuals who missed the enrollment window, KFF noted.

Where does Congress currently stand on extending subsidies?

The House has passed legislation to extend enhanced ACA subsidies, but the Senate has not yet voted. There is no announced timeline for action, and negotiations remain unresolved.

In the meantime, insurers, state regulators and other stakeholders are planning under uncertain policy conditions, complicating rate setting, benefit design and outreach strategies for upcoming plan years.

What are the implications for ACA marketplaces and insurers?

If subsidies are not extended, enrollment declines and risk pool deterioration could follow, increasing market volatility, according to CMS. If subsidies are extended late, administrative complexity and consumer confusion may persist, even if coverage losses are partially avoided.

The duration and timing of any extension can play a key role in determining how effectively marketplaces can maintain stability and predictability.

How could this affect providers and health systems?

Higher premiums and coverage losses can lead to delayed care and interruptions in treatment. Providers, particularly those serving rural or lower-income populations, may see increased uncompensated care and financial strain as a result.

These effects underscore how subsidy policy decisions influence not only insurance coverage but also continuity of care and provider sustainability.

What broader policy questions remain unresolved?

Several major questions remain unanswered, including whether Congress will pursue a short-term or longer-term extension, whether subsidy policy will be paired with enrollment or eligibility changes, and how future open enrollment windows will align with affordability policies.

Beginning in 2027, many states will move to shorter open enrollment periods, making coordination between subsidy policy and enrollment timing even more critical

The debate over ACA subsidies has evolved into a central policy issue shaping enrollment, premiums, provider finances and access to care. For payers, providers and policymakers, the outcome could influence the stability of the market and healthcare usage beyond 2026.

This FAQ was reviewed by Michael Lutz, MBA, managing director of Avalere Health.