Older Adults Face Spike in Health Insurance Costs as ACA Enhanced Premium Tax Credits Are Set to Expire

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.”

If Congress lets the enhanced premium tax credits lapse, people with incomes above 400 percent poverty will lose their cushion entirely. Midlife adults will see their average annual premiums increase by about $4,600 in 2026, according to an analysis by health care consulting firm Avalere Health for AARP. Lower-income enrollees will continue to receive premium reductions, but midlife adults with incomes at 100 to 400 percent of poverty will face average premium increases in 2026 of $600 to $1,400 per year. 

When ACA enrollees start receiving their 2026 rate notices in October, “these will be shocking figures,” Rose says. “A lot of these vulnerable populations don’t know what’s coming.”

Matt McGough, a policy analyst in KFF’s program on the Affordable Care Act, expects that premiums will increase by an average of 75 percent next year for all age groups — but the increase will 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. 

“[Insurance carriers] are setting their rates amid a fog of uncertainty,” McGough says.

The problem gets bigger

Older adults will face even more obstacles to enrolling in marketplace plans in the years to come because of changes embedded in the One Big Beautiful Bill Act. 

Starting in January 2027, individuals who were denied Medicaid because of work reporting requirements will not qualify for premium tax credits. In January 2028, people will no longer be able to auto-renew their plans. Many applicants will have to verify their income and other details to receive help with the cost, rather than self-attest this information as they can now. Nancy LeaMond, chief advocacy and engagement officer at AARP, stressed the problems this would cause for older adults in her letter to Senate leaders in June. 

Preenrollment verification “will add even more red tape for enrollees and further drive down coverage,” she wrote.

Collins worries about what will happen when these changes make ACA health insurance less attractive. 

Until now, “the marketplaces were quite stable,” Collins says. “We’d gotten to a comfortable place.” But health insurers may exit the marketplace or raise their premiums if young, healthy individuals choose to drop their coverage altogether while higher-risk participants remain. 

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 says. She pays $160 per month 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.

“I’m praying [the credit] does not go away,” she says. “I cannot do $500, $600 a month with all my other bills.”

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. 

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 when seeking medical care. 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,” McGough says.