Understanding the Future of ACA Subsidies: What Happens in 2026?

Many Americans rely on Affordable Care Act (ACA) subsidies to make their health insurance affordable. However, these subsidies are set to expire at the end of 2025, leaving millions wondering what will happen to their health coverage in 2026 and beyond.

What are ACA Subsidies?

ACA subsidies are tax credits that help lower the cost of monthly premiums for health insurance plans purchased through the Health Insurance Marketplace. These subsidies are available to individuals and families with incomes up to 400% of the federal poverty level (FPL).

The American Rescue Plan Act (ARPA) of 2021 temporarily expanded ACA subsidies to make health insurance more affordable for millions of Americans. These increased subsidies are set to expire at the end of 2025.

What Happens After 2025?

The future of ACA subsidies beyond 2025 is uncertain. Congress will need to take action to extend or modify the subsidies before they expire.

Without congressional action, the subsidies will revert to their pre-ARPA levels, which were significantly lower than the current enhanced subsidies. This would result in a significant increase in premiums for many people who rely on subsidies to make their health insurance affordable.

What are the Options?

There are several options that Congress could consider to address the expiring subsidies:

Extend the enhanced subsidies: Congress could extend the increased subsidies that were included in the ARPA for multiple years, providing continued relief to millions of Americans.
Modify the subsidy structure: Congress could make changes to the way subsidies are calculated, such as adjusting the income eligibility thresholds or the amount of the subsidy.
Eliminate the subsidies: Congress could also choose to eliminate the subsidies altogether, which would result in higher premiums for many people.

The Importance of Outreach and Education

It is crucial to inform the public about the potential impact of the expiring subsidies and encourage individuals and families to plan for the future. Insurance agents and other healthcare professionals can play a vital role in educating their clients and helping them understand their options.

If you are currently receiving ACA subsidies, it is important to stay informed about the latest developments. You can reach out to a licensed insurance agent for personalized guidance on your health insurance options.