Health Insurance Premiums Spike After ACA Tax Credits Expire

Before the pandemic, people whose incomes fell between 100 percent and 400 percent of the federal poverty level and did not have access to affordable coverage through an employer could receive financial help for their ACA plans. But those limits froze out anyone above that 400 percent threshold. 

“That was really hard for our folks, the 50 to 64, many of whom are right above that,” says Brendan Rose, a government affairs director at AARP. According to KFF, a nonprofit focused on health policy research and polling, 51 percent of ACA enrollees with incomes over four times poverty ($62,600 for an individual in 2025) fall in that age range.

In 2021, Congress boosted ACA tax credits for low-income enrollees as part of the American Rescue Plan Act and ensured that no one’s monthly premiums would exceed 8.5 percent of their annual household income. In 2022, Congress extended these benefits through the end of 2025 as part of the Inflation Reduction Act. 

AARP has been pushing Congress to make the enhanced premium tax credits permanent rather than letting them expire. In 2023, AARP joined Keep Americans Covered, a coalition of health care organizations and advocacy groups fighting for lower-cost premiums and a permanent extension of ACA credits. 

Throughout 2025, AARP also engaged with members of the Senate, House and their staff members hundreds of times to emphasize the damage the loss of these tax credits will have in a specific state or congressional district. AARP wrote to Senate committees in November and December urging lawmakers to act quickly to extend the enhanced premium tax credits and emphasizing the drastic increases that older adults would see.

“Nowhere is that pressure heavier than on Americans ages 50 to 64, who do not yet qualify for Medicare coverage and who are more likely to need health care services than other age groups,” AARP noted in its December statement.

Health insurance sticker shock

Just over 40 percent of those enrolled in ACA marketplace health insurance are between the ages of 45 and 64, according to a fact sheet published by AARP’s Public Policy Institute in September. Some retired before they were eligible for Medicare. Others work for companies that do not provide health insurance, are self-employed or are on a new path later in life. 

“A lot of folks are starting businesses, taking on new challenges or facing adverse circumstances where they were let go from their jobs and face a loss of coverage for the first time in decades,” Rose says. 

The enhanced premium tax credits meant that people with annual incomes below 150 percent of poverty may pay nothing at all for their premiums, depending on which plan they select. People with incomes above four times poverty got a break for the first time in 2021. 

For example, AARP’s Public Policy Institute found that a 60-year-old marketplace enrollee earning 450 percent of poverty, or $70,425, would pay an average annual premium of $5,760 for silver plan coverage in 2025. Without the 8.5 percent cap, that person would have paid $12,653 for the year.

These credits reduced the number of uninsured people and helped drive ACA marketplace enrollment to a record high of 24.3 million people in 2025, according to KFF.

“It shows that this just wasn’t a pandemic crisis,” says Sara Collins, senior scholar at the Commonwealth Fund, a foundation that supports health care research. “It was an affordability issue in the law itself that needed to be fixed by Congress.”

In 2025, KFF estimated that the premiums enrollees pay out of pocket would increase by an average of 114 percent in 2026 for those receiving tax credits across all age groups — but the increase would likely be higher for older adults. This spike is not just about pending expiration of the enhanced premium tax credits, though. Insurers are also concerned about rising health care and labor costs, inflation and tariffs. 

If ACA enrollees feel they cannot afford their new rates as premiums rise and enhanced tax credits disappear, the trade-offs they face are tough. Generally speaking, Dec. 15 was the last day of open enrollment for coverage that began on Jan. 1, although some states had later deadlines or added last-minute extensions. Those who sign up or change plans from Dec. 16 to Jan. 15 will gain coverage on Feb. 1. 

People may choose to downgrade to a cheaper plan, such as from a silver to a bronze plan, but that will come with more out-of-pocket costs. Those who are self-employed may decide to reenter the corporate world to access group health insurance, at the cost of job flexibility or a solo business they enjoy. Others may need to cut back on other expenses to afford medical care.

“Some individuals will be left with no good option,” says Matt McGough, a policy analyst in KFF’s program on the Affordable Care Act.

Christine Meehan, who is 51 and lives in Upper Chichester, Pennsylvania, has faced the dilemma of whether or not to maintain insurance. Meehan has been a hairstylist for 32 years. At one point, she worked for a chain that offered health insurance. Otherwise, she sometimes purchased private insurance and other times risked going without before the ACA. 

The cost of coverage through Pennie, Pennsylvania’s marketplace, “is not bad,” Meehan said in September. She paid $160 per month at that point thanks to her premium tax credits; otherwise, her monthly rate would be $583. Meehan and her fiancé explored the cost of adding her to his group health insurance, but he was quoted a rate of $600 per month.

Meehan is paying $264 out of pocket for the same plan in 2026. “It’s a $100 increase a month, but it’s still doable,” she says. “I am just going to have to watch other things.” 

Still, she notes that the increase in her monthly premiums between 2025 and 2026 will be 65 percent. 

“That’s a lot,” she says.