NEW YORK (AP) — Extended tax credits that helped lower the cost of health insurance for the vast majority of people who enrolled in the Affordable Care Act expired overnight, driving up health care costs millions of Americans at the beginning of the new year.
Democrats forced 43-day government shutdown over the problem. Moderate Republicans called for a solution save his political aspirations for 2026. President Donald Trump sailed her way outonly to back down after a conservative backlash.
In the end, no one’s efforts were enough to save the subsidies from expiring. A House vote expected in January could offer another chance, but success is far from guaranteed.
The change affects a diverse cross-section of Americans who don’t get their health insurance from an employer and don’t qualify for Medicaid or Medicare — a group that includes many self-employed workers, small business owners, farmers and ranchers.
It comes at the start of a high-stakes midterm election year affordability — including health care costs — top the list of voters’ concerns.
“What really bothers me is that the middle class has gone from being squeezed to being completely suffocated and they’re just piling on and leaving it on us,” said Katelin Provost, 37, a single mother whose health care costs will rise. “I’m incredibly disappointed that there wasn’t more action.
Some families are facing insurance costs that are doubling, tripling or more
The passed subsidies were first provided to participants in the 2021 Affordable Care Act as a temporary measure to help Americans weather the COVID-19 pandemic. Democrats in power at the time extended them, moving the expiration date to early 2026.
Thanks to expanded subsidies, some lower-income students received health care without premiums, and high-income people paid no more than 8.5% of their income. Eligibility for middle-class people was also extended.
On average, more than 20 million subsidized enrollees in the Affordable Care Act will see their premium costs rise 114% in 2026, according to an analysis by the nonprofit health care research organization KFF.
These skyrocketing prices come alongside overall increases in US health care costs, which are further increasing out-of-pocket costs in many plans.
Some participants, such as Salt Lake City independent filmmaker and adjunct professor Stan Clawson, absorbed the additional costs. Clawson said he paid less than $350 a month for insurance last year, a number that will jump to nearly $500 a month this year. It’s a burden for the 49-year-old, but one he’s willing to take because he needs health insurance as someone who lives with paralysis from a spinal cord injury.
Others, like Provost, struggle with steeper climbs. An insured social worker’s monthly payment increases from $85 a month to nearly $750.
The effects on registration remain to be seen
Health analysts have predicted that the end of the subsidies will prompt many of the 24 million enrolled in the Affordable Care Act — especially younger and healthier Americans — to forgo health insurance altogether.
Over time, this could make the program more expensive for the older, sicker population that remains.
An analysis conducted last September by the Urban Institute and Commonwealth Fund projected that higher premiums from ending subsidies would cause about 4.8 million Americans to drop coverage in 2026.
But with the Jan. 15 window still open for most states to choose and change plans, the final effect on enrollment remains to be determined.
Provost, a single mother, said she hopes Congress finds a way to revive the subsidies early in the year — but if not, she’ll drop the insurance and keep it just for her 4-year-old daughter. At the current price, he can’t afford to pay for both of their coverages.
Months of discussion but still no relief
Last year, after Republicans slashed more than $1 trillion in federal health care and food aid with Trump’s big tax-cut and spending bill, Democrats repeatedly called for the subsidies to be extended. But while some Republicans in power acknowledged the problem needed to be addressed, they refused to vote on it until the end of the year.
In December, the Senate rejected two bipartisan health care bills — a Democratic proposal to extend the subsidies for another three years and a Republican alternative that would instead provide Americans with health savings accounts.
In the House, four centrist Republicans broke with GOP leadership and joined forces with Democrats force a vote this could happen as early as January with the three-year extension of tax credits. But with the Senate already rejecting such a plan, it’s unclear whether it could gain enough momentum to pass.
Meanwhile, Americans whose premiums are skyrocketing say lawmakers don’t understand what it’s really like to struggle with how to deal with health care costs skyrocketing without any relief.
Many say they want the subsidies restored along with broader reforms to make health care more affordable for all Americans.
“Republicans and Democrats have been saying for years, oh, we’ve got to fix this. Then do it,” said Chad Bruns, a 58-year-old student of the Affordable Care Act in Wisconsin. “They have to get to the root cause, and no political party ever does that.”
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