Average marketplace health insurance cost on track to double, KFF says

Millions of low- and middle-income households will see their health insurance premiums skyrocket in 2026 if Congress allows pandemic-era subsidies to expire, health policy think tank KFF warned Tuesday.

Those subsidies help about 22 million Americans buy health insurance on the Affordable Care Act marketplace and have emerged as a key bargaining chip in stalled congressional negotiations over federal funding that are expected to result in a government shutdown early Wednesday.

Known as enhanced premium tax credits, the subsidies were first adopted in 2021 as part of a coronavirus relief package that was intended to help keep people insured during the public health emergency. The subsidies were later extended by the Inflation Reduction Act through the end of this year.

Enrollment in the marketplace has soared since Congress adopted the enhanced subsidies. Nearly 24 million people used the marketplace to find insurance in 2024, setting a new record.

People with more modest incomes will see more jaw-dropping rises in their premiums if the tax credits expire, according to KFF's analysis. For example, someone making $28,000 annually pays no more than $325 of their income for what's considered a benchmark plan. If the subsidy expires, that person would be paying $1,238 for the same plan, according to KFF.

Congressional Democratic leaders Rep. Hakeem Jeffries and Sen. Chuck Schumer, both of New York, have demanded that an extension of the subsidies be included in any government funding bill.

"Republicans are plunging us into a government shutdown rather than fixing their healthcare crisis," Schumer said in a post on X Tuesday.

Republicans have resisted extending the subsidies, arguing they were intended to be temporary and that they have contributed to fraud. Party leaders have demanded that Democrats agree to fund the government through the end of the year.

Some Republicans have been open to shielding Americans from sudden healthcare costs. Sens. Lisa Murkowski of Alaska and Mike Rounds of South Dakota said in posts on X that the appropriations process is where issues concerning marketplace subsidies should be addressed.

Overall, the average annual out-of-pocket premium payment for people receiving the enhanced subsidies will more than double after they expire, jumping from $888 to about $1,904, according to KFF.

Lower-income households will have to pay hundreds of dollars for health insurance that was previously free under the enhanced subsidies, KFF found. Households with incomes between $35,000 and $65,00 will have to pay more, ranging from around $1,500 to $1,800 a year. Those making more that that will see varying increases, according to the think tank.