As 2026 begins, millions of Americans are waking up to a painful new reality: health insurance that was previously affordable is suddenly far out of reach.
Families, freelancers, farmers, and small company owners all throughout the country are seeing their premiums go up a lot because the improved federal subsidies for Affordable Care Act plans have run out. Many of them say they now have to make hard financial choices.
“Health insurance has gone from being a basic need to a luxury.
These subsidies, which made insurance much cheaper for consumers buying it on the individual market, technically ceased at the start of the year since Congress couldn't agree on how to prolong them. Lawmakers couldn't act before the deadline, even though there had been months of political maneuvering, public warnings from health policy experts, and mounting fear among voters.
What Changed and Why It Matters
Originally, the payments were increased in 2021 as part of an effort during the pandemic to keep health coverage stable throughout COVID-19. At the time, the federal government raised tax credits for those who bought insurance through the Affordable Care Act exchanges for a short time.
Three big things happened because of the changes: They got rid of monthly premiums for a lot of low-income clients. They limited premiums for people with higher incomes to 8.5% of their family income. They made it possible for middle-class families who used to make too much money to qualify to do so.
The expansion changed everything. Enrollment reached an all-time high, with around 24 million people signing up across the country. Many Americans who had been without health insurance for a long time finally felt safe in case of a medical emergency.
But the subsidies were never made permanent. They were extended by Congress once, which pushed the end date back to January 1, 2026. When that date came, the extra credits disappeared overnight.
KFF says that the average premium prices for people who get help with the ACA will go up by 114% in 2026. That implies that a plan that used to cost $300 a month might now cost more than $600, even though the coverage is still the same.
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Prices Go Up Across the Country
For a lot of those who signed up, the financial effects have been quick and bad.
Some families are seeing much bigger rises. Families are now having to think about whether they can afford insurance at all because monthly prices that used to be less than $100 have gone up to $700 or more.
These price increases are happening at the same time as other increases in U.S. health care costs, including as increased deductibles, higher pricing for prescription drugs, and more out-of-pocket payments.
Real People, Real Effects
For those who are affected, this isn't just a theory; it's very real.
People who are single parents, self-employed, or have chronic conditions say that the abrupt rise in costs feels like a betrayal after years of being promised that the ACA was working.
Some people who signed up have decided to pay the additional premiums, even though it makes their finances tight. Some people are lowering their coverage, abandoning their policies, or even dropping their insurance altogether.
Parents say they put their children's coverage ahead of their own, even though they don't have it. Older Americans who aren't yet eligible for Medicare are worried that one medical event may wipe all their savings.
Many people think that health insurance has gone from being a basic need to a luxury.
Political Gridlock and Missed Deadlines
For those who are affected, this isn't just a theory; it's very real.
People who are single parents, self-employed, or have chronic conditions say that the abrupt rise in costs feels like a betrayal after years of being promised that the ACA was working.
Some people who signed up have decided to pay the additional premiums, even though it makes their finances tight. Some people are lowering their coverage, abandoning their policies, or even dropping their insurance altogether.
Parents say they put their children's coverage ahead of their own, even though they don't have it. Older Americans who aren't yet eligible for Medicare are worried that one medical event may wipe all their savings.
Many people think that health insurance has gone from being a basic need to a luxury.
Uncertain Future and Broader Impacts
In December, the Senate turned down two different proposals: A measure supported by Democrats that would have kept the subsidies going for three more years. Instead, a Republican option centered on growing health savings accounts. Neither approach got support from both parties.
A small group of centrist Republicans in the House joined Democrats to force a vote on a three-year extension. This might yet happen in January. But the Senate has already turned down a similar plan, so the future of this one is still up in the air.
For now, Americans are stuck in limbo. They hope Congress acts fast, but they are also getting ready for the worst: that help may never arrive.
Experts in health policy say that the effects could go well beyond individual homes. When insurance costs go up, younger and healthier people are generally the first to quit the market. That kind of change can make the whole system less stable, leaving behind a group of participants who are older and sicker and making expenses go up even more.
The Urban Institute and the Commonwealth Fund worked together to figure out that 4.8 million Americans could lose their ACA coverage in 2026 when the subsidies run out. This kind of reduction would undo years of work to lower the number of people without health insurance and might put even more stress on hospitals, emergency rooms, and state health systems.
Charlotte Reynolds
Political Journalist
Charlotte Reynolds is a political journalist with years of experience covering Congress, federal policies, elections, and political strategy. She provides in-depth analysis and commentary on national issues.
