Millions of Americans who gained affordable health insurance through enhanced Affordable Care Act subsidies now face sharply higher premiums or the loss of coverage entirely. The enhanced premium tax credits created under the American Rescue Plan Act and extended through 2025 have lapsed, and modeling from the Urban Institute projects that 7.3 million fewer people will hold subsidized Marketplace plans in 2026 as a result. Federal enrollment data already shows the effects: roughly 3 million fewer people carried ACA plans in February compared to the same period a year earlier.
Subsidy Expiration Hits States With High Marketplace Enrollment Hardest
The premium tax credit expansion, first enacted under ARPA, lowered monthly costs for existing enrollees and opened subsidies to middle-income households that had previously earned too much to qualify. With those credits reverting to their pre-ARPA structure, the Urban Institute projects that 4.8 million more people will be uninsured in 2026 compared to a scenario in which the enhanced credits continued. The 7.3 million figure represents the total drop in subsidized Marketplace coverage, meaning some of those individuals will shift to employer plans or Medicaid while others will go without insurance altogether.
States that saw the largest enrollment gains during the subsidy expansion period stand to absorb the steepest losses. When uninsured rates climb, hospitals and safety-net clinics typically absorb higher uncompensated care costs, a burden that shows up in quarterly financial disclosures and state budget reports. The Marketplace enrollment files from CMS provide the state-level baseline against which those cost increases can be tracked, though no federal agency has yet published a formal analysis connecting the subsidy lapse to hospital-level financial outcomes.
In many states, Marketplace plans became a central part of the individual insurance market during the years when enhanced subsidies were available. Insurers priced products and built provider networks around the expectation of relatively stable, subsidized enrollment. As subsidies shrink, some carriers may respond by raising premiums further, narrowing networks, or exiting certain regions, compounding the impact on consumers in areas that already have limited plan choices.
CBO Scoring, Urban Institute Modeling, and Early Federal Data
The Congressional Budget Office scored the option of permanently extending the ARPA premium tax credit structure, finding that doing so would increase federal spending but also raise the number of insured Americans in later years. That CBO analysis provides the budgetary context for the political standoff: extending the credits carries a measurable fiscal cost, while letting them expire shifts costs onto individuals and the health care system in ways that are harder to quantify on a federal balance sheet.
The Urban Institute’s projection of 7.3 million fewer subsidized enrollees uses pre-ARPA subsidy rules as its baseline scenario for 2026. That same modeling produces the 4.8 million uninsured estimate by comparing coverage levels under the two policy paths, underscoring how sensitive Marketplace enrollment is to premium affordability. The researchers assume that some people will find other coverage, but many lower-income adults-especially in states with higher premiums or fewer plan options-are expected to drop coverage entirely when faced with higher monthly bills.
Early federal figures reported by the Associated Press confirm that enrollment declines are already materializing, with roughly 3 million fewer people holding ACA plans as of February relative to the prior year. HHS has acknowledged the enrollment drop but has not published a detailed breakdown attributing specific shares of the decline to subsidy expiration versus other factors such as Medicaid redeterminations, changes in employment-based coverage, or voluntary exits from the individual market.
That lack of granular, publicly available data makes it difficult for policymakers to distinguish between short-term churn and a structural retreat from the Marketplace. It also complicates efforts by states and insurers to anticipate how many people will seek alternative coverage options, and how many are likely to end up uninsured and relying on emergency rooms and charity care.
Gaps in the Data and What Enrollees Should Do Now
For now, several key questions remain unanswered. Federal agencies have not released detailed, state-by-state analyses tying enrollment changes to specific income levels or premium increases after the enhanced credits expired. Nor is there a comprehensive national picture of how many people are transitioning to employer coverage versus Medicaid, or how many are simply dropping out of the insurance system. Without that information, it is hard to design targeted outreach or financial assistance for the groups most at risk.
Despite those gaps, current and former Marketplace enrollees can take concrete steps to protect themselves. People who purchased coverage through HealthCare.gov or a state exchange should log in to their accounts and review their 2026 plan options as soon as the next open enrollment period begins. Comparing premiums, deductibles, and out-of-pocket limits across plans can reveal lower-cost alternatives, especially for those willing to switch insurers or adjust provider networks.
Consumers whose incomes have fallen may newly qualify for Medicaid or for larger premium tax credits under the pre-ARPA rules. It is important to update income and household information on Marketplace applications promptly, since eligibility for financial assistance is recalculated based on those details. Some community health centers, nonprofit navigators, and insurance brokers offer free help evaluating options and completing enrollment forms, which can be especially valuable for people facing steep premium hikes.
Individuals who lose Marketplace coverage outside of open enrollment because they can no longer afford their plan should check whether they qualify for a special enrollment period tied to changes in income or household circumstances. They should also ask employers about any available group coverage, including for part-time workers, and weigh the total cost of premiums and cost sharing rather than focusing on the monthly premium alone.
Ultimately, whether Congress revisits the enhanced subsidy structure will determine how long the current coverage erosion continues. Until then, the combination of Urban Institute projections, CBO budget scoring, and early federal enrollment data points to a clear trend: as subsidies shrink, more Americans are likely to find Marketplace coverage out of reach, and the consequences will ripple through families, state budgets, and the broader health care system.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
