Amidst a backdrop of soaring premiums and dwindling tax credits, the Affordable Care Act (ACA) enrollment numbers have taken a hit. According to recent federal data, approximately 1.4 million fewer individuals have signed up for ACA plans compared to the same period last year. This trend is particularly concerning as the deadline for enrolling in health insurance under the ACA looms, with most states' sign-up period ending on January 15th. The primary culprit behind this decline is the expiration of ACA subsidies, also known as premium tax credits, which significantly reduce the out-of-pocket cost of monthly premiums for those purchasing insurance through the marketplace. These subsidies, a cornerstone of the original ACA legislation, were bolstered during the COVID-19 pandemic to provide more substantial financial assistance to eligible individuals and expand coverage to a broader population. The majority of ACA marketplace enrollees were benefiting from these enhanced subsidies, which were set to expire in 2026, causing a surge in premiums for many. This situation was further exacerbated during the longest government shutdown in U.S. history, where the subsidies became a contentious issue. Republicans argued that the pandemic-era expansions went too far and attempted to negotiate a temporary spending bill that didn't address the expiring subsidies, promising to discuss their continuation later. Conversely, Democrats insisted on extending the premium tax credits as a condition to end the shutdown, warning of dire consequences for millions of American families if the subsidies were allowed to lapse. The Senate's bipartisan deal to end the shutdown, which excluded Democratic demands on healthcare, failed to resolve the issue. The House, however, recently passed a Democratic-led bill to extend the enhanced premium tax credits by three years, aiming to prevent a substantial increase in benchmark premiums. Without such an extension, the Congressional Budget Office estimates a 4.3% rise in gross benchmark premiums in 2026 and a 7.7% increase in 2027 for those on marketplace plans. This could result in a staggering 114% average premium increase for those receiving financial assistance, from $888 in 2025 to $1,904 in 2026, according to KFF analysis.
