As the final days of 2025 slip away, Congress is poised to allow the Affordable Care Act’s enhanced subsidies to fully expire.
The future of these tax credits and the impact they could have on enrollment was a headliner in healthcare in the back half of the year, and experts warn that it’s unclear what comes next.
Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy, told Fierce Healthcare that with an extension almost certainly off the table, it’s going to force tough decisions for consumers now even if Congress acts in early 2026.
“That's going to force some really difficult choices for folks,” she said. “I think younger, healthier folks may decide to go uninsured. Others are going to have to make pretty significant financial sacrifices.”
The state of the debate
Earlier this week, the House of Representatives passed a healthcare package that aimed to address affordability, but Republicans overcame a last-ditch effort from Democrats and several GOP moderates to force a vote on the subsidies. Legislators have headed home for the holidays, leaving a deal in flux until the beginning of 2026.
The subsidies also failed to pass out of the Senate earlier this month, and that chamber also batted down a bill that sought to address the looming cost spike through contributions to health savings accounts (HSAs).
Corlette said those measures wouldn’t likely have helped avert the sudden increase for people who receive the enhanced tax credits.
“It doesn't help this population,” she said. “I think it will help healthy and wealthy folks, but for people who are right now dealing with big premium spikes going into 2026, it doesn't do anything for that.”
HSAs and other approaches to give consumers a bit more skin in the game for their healthcare have long been Republican priorities. The One Big Beautiful Bill Act expanded eligibility for HSAs to bronze and catastrophic plans on the exchanges beginning Jan.1.
Meanwhile, the conversation around the subsidies has taken on a far more populist tone, with leading Republicans—including President Donald Trump—characterizing them as a gift to health insurers.
Larry Bucshon, M.D., a senior policy advisor for the firm Holland & Knight and a former Republican representative, told Fierce that as the political conversation has shifted that direction, it’s zapped much of the will legislators may have had to reach a deal.
He said that just a few months ago some kind of bipartisan deal seemed ripe for the taking.
“My impression is that it’s going to be really difficult to get something through the House on these tax credits because, fundamentally, people are just against them,” he said. “They see it as a subsidy to insurance companies, not to the citizens.”
However, he added that healthcare has always been an issue that Democrats have polled favorably on. It’s anticipated that health costs will be a key talking point in the 2026 midterm elections.
What Jan. 1 could look like
The jury is still out on the broader impacts of the subsidies ending. KFF estimated that out-of-pocket costs for premiums will increase by an average of 114%, or more than $1,000 per person each year.
And, in a recent survey, 6 in 10 people who currently receive marketplace coverage told KFF that they could not afford an annual increase of $300 or more in healthcare costs without a severe disruption to their finances.
The Urban Institute estimated that about 4 million people could become uninsured in 2026 without the enhanced tax credits in place.
The Trump administration released its first snapshot report on enrollments on the exchanges Dec. 10, saying nearly 5.8 million had enrolled through Nov. 29. Individuals had until Dec. 15 to select plans that go into effect Jan. 1.
Corlette said that even with those data it will “be quite some time” before the industry has the full picture of the state of the individual market.
She said younger, healthier individuals are more likely to sign up later in the open enrollment cycle or be automatically reenrolled, and they may choose to drop their coverage once they see what the costs ultimately look like.
“Unfortunately, that leaves insurance companies with a smaller and thicker risk pool, and that is going to drive prices up even higher, not for 2026 but for 2027,” Corlette said.
Erik Wissig, chief operating and financial officer for SureCo, a company that administers individual health coverage reimbursement arrangements, or ICHRAs, told Fierce that insurers have already planned for a future without the subsidies.
“Insurance carriers have already hedged their bets that these folks will leave, because otherwise they would put themselves in too big a risk assuming they’re going to stay,” Wissig said.
He added that payers were bracing for a difficult 2026 anyway given the broader environment and program integrity changes for the marketplace that were set to take effect.
Many of the key provisions in the program integrity update have been stayed in the courts for now.
“This is just a really painful year that seems like here’s a reset, and the expiration of the subsidies is kind of multiplying it,” Wissig said.
Corlette said it’s also not clear whether legislators would be able to do something that mitigates the impacts in the beginning of the year should they act once the calendar turns.
Key rulemaking for the Affordable Care Act (ACA) market happens fairly early in the year—the program integrity rule was proposed in March 2025, for example—and that will also play a role in how payers respond.
“It’s hard to know what, if any, effect that will have on the enrollment numbers, market morbidity, all these things that carriers have to think about as they make decisions about participation and prices going into 2027,” she said.
Wissig said one bright spot, however, could be the potential for ICHRAs to help stabilize the risk pools should younger, healthier people exit this market in significant numbers.
Under an ICHRA model, an employer would offer a stipend to workers that they can use to purchase coverage on the exchanges. This allows them to choose plans that work best for their needs, and would also likely bring younger and healthier individuals back into the risk pools.
“ICHRA fundamentally brings employed people into the individual market,” he said. “Bringing that population into individual markets supports the stabilization of the market, and therefore the exchanges and those participating in that.”
An unprecedented moment for the ACA?
The ACA has been a political football for the entirety of its life as a law. From its more common moniker as Obamacare to the multiple attempts to limit or eliminate the law, upheaval is not a particular stranger.
But Bucshon said the current moment for the ACA comes at a time when healthcare costs are rapidly accelerating, which puts new stakes on the political debate around the landmark law.
“It’s gotten to the point where it’s kind of reached a head, where there are people out there expecting the government to do something about it,” he said. “And I think that puts more pressure on some of the Affordable Care Act policies.”
The closest likely analogue to the current moment was Republican’s 2017 effort to repeal and replace the law, which ultimately failed but did lead them to zero out the individual mandate penalty, considered one of the key elements of the ACA.
Corlette said one possible outcome is that people choose to pay their premiums for the first few months of the year and stack a bunch of services during that window, which could impact how insurers plan around rates.
“[Insurers] don’t like to have the kind of uncertainty that they’re going to be facing,” she said. “So I think all of that is just likely to sort of lead to this cocktail of instability and higher prices and potentially fewer coverage options as we go into 2027.”