On December 31, 2025, temporary Affordable Care Act (ACA) subsidy expansions expired. Beginning in 2026, subsidy eligibility and benefit levels reverted to those set under the original ACA law.

The ACA, which was passed in 2010, intended to expand health insurance coverage and reduce healthcare costs. The law established the Health Insurance Marketplace as a platform where individuals and families can shop for and enroll in private, ACA-approved health insurance plans.

The ACA Marketplace’s purpose is to provide an insurance option for people who don't have insurance through an employer (like freelancers, people between jobs, part-time workers), or through a public program like Medicaid or Medicare. While ACA Marketplace plans are available to most people regardless of income, the ACA also offers income-based subsidies to eligible enrollees to make monthly premiums more affordable.

During the COVID-19 pandemic, eligibility requirements for ACA assistance were temporarily expanded in 2021 to help prevent coverage losses. Because those enhancements expired at the end of 2025, some enrollees may pay higher monthly premiums starting in 2026.

ACA subsidies refer to the act’s two main forms of financial assistance for Marketplace coverage: premium tax credits and cost-sharing reductions.

Premium tax credits lower the monthly cost of health insurance purchased through the ACA Marketplace for eligible households. These credits are often delivered in advance as Advance Premium Tax Credits (APTCs), which are paid directly to insurance companies by the federal government on behalf of enrollees, reducing enrollees’ monthly premium costs.

The credit amount is based on household size and estimated annual income for the coverage year. Because APTCs are paid using income estimates, the final credit amount is reconciled when ACA enrollees file their federal tax return. If a household’s actual income is higher than estimated, they may have to repay some or all the credit. If their income is lower than estimated, they may receive an additional refund.

Enhanced premium tax credits were temporary expansions of the ACA’s existing APTCs, enacted during the COVID-19 pandemic through the American Rescue Plan Act (2021) to improve healthcare affordability. They were later extended through 2025 by the Inflation Reduction Act (2022) and expired at the end of December 2025.

These enhancements increased subsidy amounts and expanded eligibility to higher-income households, which lowered monthly premiums for some enrollees during a period of increased job loss and income changes.

Specifically, the enhancements:

• removed the income cap for eligibility, which had previously limited premium tax credits to households earning no more than 400% of the federal poverty level.
• limited household premium contributions to 8.5% of income, reducing how much enrollees paid each month for Marketplace plans.

From 2021 through 2025, enhanced credits expanded eligibility and increased subsidy amounts. During this period, ACA Marketplace enrollment and average APTC payments rose in most states.

When these enhanced premium tax credits expired, APTCs reverted to their pre-2021 structure.

In 2025, 92.0% received the APTC. That was up from 84.1% in 2020, which was before the introduction of enhanced premium tax credits.

But the rising percentage of people who received subsidies only tells part of the story. From 2020 to 2025, ACA Marketplace enrollment increased 113.2%. While the number of enrollees who did not receive APTCs remained relatively stable, the number of people who received APTCs increased 133%—from nearly 9.6 million in 2020 to 22.4 million in 2025.

Nationwide, eligible APTC enrollees received an average of $550 per month in APTCs in 2025.

Enrollees in West Virginia and Alaska received the highest average APTC payments: $1,102 and $1,008 respectively. These were the only two states where the average APTC payment exceeded $1,000.

The lowest average APTC payments were New Hampshire ($338) and Minnesota ($364). These were the only states with averages lower than $400.

The average premium for APTC recipients decreased in most states after enhanced subsidies took effect in 2021. Premiums decreased in 26 states, increased in 20 states and Washington, DC. North Carolina was the only state where they stayed the same.

Between 2020 and 2025, premiums decreased the most for West Virginia recipients (down -61.1%, from $190 to $74). Premiums fell by more than 50.0% in three other states: Louisiana (-59.7%), Indiana (-51.9%), and Texas (-50.7%).

Premiums for APTC recipients increased the most in Iowa, up 191.2%, from $32 to $99. Washington, DC, was the only other location where premiums more than doubled, rising from $219 in 2020 to $443 in 2025 (a 102.3% increase).

It's possible for average premiums to increase if the mix of enrollees changes: when higher-income households become eligible for APTCs, they typically receive smaller subsidies and therefore pay a larger share of their premiums. As more of these enrollees enter the Marketplace, the average premium paid by APTC recipients can rise, even if many are paying less than before.

Although enhanced subsidies have expired, the House of Representatives passed a bill in January 2026 which could lead to subsidy reinstatement.

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