Enhanced premium tax credits (ePTCs) created by the American Rescue Plan Act (ARPA) and extended by the Inflation Reduction Act have made Affordable Care Act (ACA) marketplace coverage more affordable. They eliminated the 400 % Federal Poverty Level (FPL) income cap and capped premiums at 8.5 % of income, helping 24 million people afford health insurance[13]. These enhancements expire on December 31, 2025 unless Congress acts[14].

Why the Enhanced Credits Matter

• Widespread reliance: In 2025, 92 % of marketplace enrollees—over 22 million people—received enhanced premium tax credits[15]. Without them, average net premiums could more than double and millions of people may lose coverage[16].
• Projected coverage losses: Researchers estimate that 4.8 million more people could become uninsured in 2026 if the enhanced tax credits are not extended[16].
• Washington state example: LifeWise, a Washington insurer, warns that about 75 % of Washingtonians receiving enhanced credits will be affected. Premiums for marketplace buyers could rise by 65 %, potentially causing 80,000 residents to drop coverage[17].
• National impact: Avalere Health’s analysis shows that, with the credits extended, more than 18 million Americans could receive enhanced subsidies in 2026; about 4.8 million would be ages 50–64[18]. If the enhancements expire, these consumers will face reduced or nonexistent tax credits[18].

Background on Premium Tax Credits

The ACA provides premium tax credits for households with incomes between 100 % and 400 % of FPL to make marketplace plans affordable. ARPA expanded eligibility by fully subsidizing premiums for people with incomes up to 150 % FPL and allowing households above 400 % FPL to receive credits if their premiums exceed 8.5 % of income[19]. The Inflation Reduction Act extended these enhancements through 2025[19].

Consequences of Expiration

• Higher premiums: Without extension, marketplace insurers may set higher rates for 2026, leading to significant premium increases. For example, the Georgetown University Center for Children and Families projects that average premiums could rise 114 %; a family of four earning $50,000 in New Hampshire could see monthly premiums jump from $9 to $186[20].
• Loss of coverage for certain immigrants: Recent legislation stripped premium tax credits for some lawfully present immigrants earning below the poverty line and DACA recipients, causing an estimated 300,000 people to lose coverage[21].

How to Prepare

1. Check your current subsidy: Log into your marketplace account to see whether you’re receiving an enhanced credit. LifeWise recommends reviewing your 2025 plan details or calling customer support[22].
2. Compare plans early: Because premiums may vary widely, shop for 2026 coverage during open enrollment (Nov 1, 2025 – Jan 15, 2026)[23]. Compare premiums and benefits across metal tiers and carriers to see which plan offers the best value[24].
3. Seek assistance: Talk to a licensed broker or navigator for free help. For example, LifeWise suggests contacting its brokers or customer service to get customized quotes[25].
4. Advocate for legislative action: Consumers can contact their representatives and urge extension of the enhanced credits. Some federal proposals, such as the CARE Act, have aimed to make the credits permanent, but their future is uncertain[26].

Bottom Line

Enhanced premium tax credits have made marketplace coverage more affordable for millions. Without congressional action, these subsidies will end on December 31, 2025, causing premiums to spike and millions to lose coverage. Review your plan, shop early and stay informed about legislative developments to protect your access to affordable health insurance in 2026.