If you are a reader of our blog, you are familiar some of the high-profile tax breaks from the One, Big, Beautiful Bill Act (OBBBA) such as extensions of TCJA (Tax Cuts and Jobs Act) provisions, an expanded SALT (State And Local Taxes) deduction cap, and even new benefits for tips and overtime.

However, one major omission will hit clients hard starting January 1, 2026: the enhanced ACA (Affordable Care Act) premium subsidies—in place since 2021—will expire.

That change, combined with insurer rate hikes already being filed for 2026, creates a double affordability shock for households that rely on marketplace health insurance.

What’s Changing in 2026

Since 2021, the enhanced subsidies have:

  • Eliminated the 400% Federal Poverty Level (FPL) cap on eligibility
  • Boosted credit amounts for lower-income taxpayers
  • Protected middle-income families from premium sticker shock

When they expire, the old rules return:

  • Anyone above 400% FPL will no longer qualify for premium tax credits (about $125,000 for a family of four in 2026)
  • Lower-income households will see reduced subsidies
  • Premiums will feel significantly less affordable, especially for self-employed and early retirees

The Kaiser Family Foundation (KFF) projects a median 18% premium increase for 2026 plans—the steepest since 2018. Out-of-pocket premium costs could rise more than 75% for some clients losing subsidies.

Link KFF – How Much and Why ACA Marketplace Premiums Are Going Up in 2026

Insights from CBPP: Five Key Marketplace Shifts

The Center on Budget and Policy Priorities (CBPP) highlights five developments to watch:

  1. Coverage Losses – Roughly 4 million people could lose coverage entirely in 2026 if subsidies aren’t extended.
  2. Premium Hikes Across the Board – Even those still eligible for subsidies will feel higher costs due to gross premium increases.
  3. Weaker Risk Pool – Higher premiums drive healthier enrollees out, leaving a sicker, costlier pool—pushing premiums even higher.
  4. Insurer Adjustments Already Happening – Many 2026 filings explicitly factor in subsidy expiration with a “surcharge” for anticipated enrollment losses.
  5. Uncertain Rate Environment – Because insurers don’t know if Congress will act, many are filing conservative (higher) rates to hedge risk.

Link CBPP – Five Key Changes to ACA Marketplaces Amid Uncertainty Over Premium Tax Credit Enhancements

What’s Driving Premium Growth (Health System Tracker)

Beyond the subsidy issue, insurers point to several cost drivers behind 2026’s projected increases:

  • Medical inflation and higher utilization – Projected medical cost trends are ~8%+ for hospitals and physician services.
  • Prescription drugs – Specialty drugs and GLP-1 medications (for diabetes/weight loss) are major drivers of costs.
  • Labor and contracting pressures – Staffing shortages, provider consolidation, and higher reimbursement demands inflate insurer expenses.
  • Subsidy expiration assumptions – Many filings add 3–5% to account for expected exits of healthier enrollees if subsidies vanish.

Link HST – How much and why ACA Marketplace premiums are going up in 2026

New ACA Rules Starting in 2026

OBBBA also tightens marketplace operations:

  • Full repayment of excess Advance Premium Tax Credits (APTC) – no repayment caps remain.
  • Shorter open enrollment – November 1 to December 15 only.
  • Manual re-enrollment required – no auto-renewals; clients must verify eligibility each year.
  • Zero-premium penalty – $5/month charge for those auto-enrolled in “free” plans without confirming eligibility.

Link Health Insurance – One Big Beautiful Bill Act brings sweeping changes to health coverage

The OBBBA made big tax headlines, but the silence on ACA subsidies creates a major affordability setback starting in 2026. Between subsidy loss and structural premium hikes, many clients—especially the self-employed and early retirees—will face sticker shock. We recommend that our readers get familiar with these changes and contact their insurance specialist to run scenarios and some relevant factors like income timing, tax planning, and enrollment strategies to minimize the impact.

We expect that there will be more coverage over the next few weeks on major media channels, you can see below some recent articles:

Link The Hill – Conservative leaders urge Trump to let health care tax credits expire

Link Politico – House centrists attempt quiet rescue of Obamacare subsidy talks