Enhanced ACA premium tax credits expire, millions face cost hikes

Enhanced Affordable Care Act premium tax credits expired Dec. 31, 2025, ending temporary provisions that expanded eligibility and increased subsidy amounts. The American Rescue Plan Act, passed Mar. 11, 2021, eliminated the income cap (previously 400% of federal poverty level) and capped premiums at 8.5% of income for all enrollees. The Inflation Reduction Act extended these provisions through Dec. 31, 2025. Without extension, premiums for 24 million ACA marketplace enrollees jumped, with some facing doubled or tripled monthly costs.

The House passed H.R. 612, a three-year clean extension of enhanced premium tax credits, on Jan. 8, 2026, by a 230-196 vote. All Democrats voted yes. Seventeen Republicans broke with leadership to support the bill: Reps. Don Bacon (NE), Mike Turner (OH), Young Kim (CA), David Valadao (CA), Mike Lawler (NY), Andrew Garbarino (NY), Anthony D'Esposito (NY), Nick LaLota (NY), Marc Molinaro (NY), Brandon Williams (NY), Jen Kiggans (VA), Lori Chavez-DeRemer (OR), Brian Fitzpatrick (PA), Juan Ciscomani (AZ), Mariannette Miller-Meeks (IA), Marcus Molinaro (NY), and Victoria Spartz (IN).

House Minority Leader Hakeem Jeffries filed a discharge petition in late Dec. 2025 to force a floor vote over Speaker Mike Johnson's objections. Four moderate Republicans—Reps. Don Bacon, Mike Lawler, Young Kim, and David Valadao—signed the petition, joining all 214 Democrats to reach the 218-signature threshold. The procedural vote passed Jan. 7, 2026, by 221-205, with nine Republicans voting yes. The final passage vote Jan. 8 saw 17 Republicans support it.

The Congressional Budget Office estimated Jan. 8 that a three-year extension would cost $80.6 billion over ten years, increasing the federal deficit. Without the enhanced subsidies, CBO projects 3.7 million fewer people will have ACA coverage in 2026. The enhanced subsidies cost roughly $50 billion in FY 2025. CBO also warned that premium hikes could destabilize insurance markets as healthier enrollees drop coverage, leaving sicker, more expensive enrollees in the pool.

The Senate rejected two proposals to extend enhanced subsidies on Dec. 11, 2025. The Democratic three-year extension and a Republican one-year extension with reforms both failed 51-48 (60 votes required to advance). Four Republicans—Sens. Susan Collins (ME), Lisa Murkowski (AK), Dan Sullivan (AK), and Josh Hawley (MO)—voted yes on the Democratic version. Senate Majority Leader John Thune said Jan. 8 there's 'no appetite' for a clean extension in the Senate.

A bipartisan Senate working group, led by Sen. Bernie Moreno (R-OH), is negotiating a compromise bill expected as early as Jan. 13, 2026. Potential reforms include minimum premium payments (eliminating zero-dollar plans) or Hyde Amendment restrictions prohibiting federally subsidized plans from covering abortion services. Democrats have historically rejected Hyde-style abortion restrictions as non-starters. Whether a compromise can pass both chambers and reach President Trump's desk remains uncertain.

Insurers and patient advocates warn that the expiration destabilizes ACA marketplaces. Monthly premiums jumped by an average of 150-200% for enrollees earning over 400% of the federal poverty level (roughly $60,240 for individuals in 2025). A 🍁Vermont farmer quoted by NPR saw premiums jump from $900 to $3,200 per month. Roughly 9 million people earning over 400% FPL relied on the enhanced subsidies to afford coverage. Without action, CBO projects 3.7 million will drop coverage in 2026.