Premium Shock Ahead: What Happens If ACA Subsidies Disappear Amid the Government Shutdown?

Across the U.S., health care experts are warning that a “premium shock” could be coming for millions of Americans who rely on Affordable Care Act (ACA) marketplace coverage. Two major events are creating uncertainty for consumers and insurers alike:

1. A partial federal government shutdown has left Congress divided over budget funding and key health care provisions — including whether to extend the enhanced premium subsidies that have kept ACA plans affordable.
2. The enhanced subsidy program, first introduced during the pandemic and later extended through 2025, is scheduled to expire unless new legislation passes.

If those subsidies expire, households that have enjoyed historically low monthly premiums could face substantial cost increases starting in 2026.

(Sources: Rockefeller Institute of Government, Bipartisan Policy Center, National Women’s Law Center)

Why This Matters Right Now

These subsidies — also known as Enhanced Premium Tax Credits (ePTCs) — expanded eligibility and lowered monthly premiums for millions of Americans purchasing health insurance through the ACA marketplace.

When they expire, several key effects are expected:

• Premiums could rise significantly. According to Axios, without the subsidy extension, average premiums could more than double for some enrollees.
• Coverage disruptions may increase.Investopedia notes that when premiums rise, some healthy individuals drop coverage, leaving a smaller and sicker pool of enrollees that drives costs even higher.
• States that did not expand Medicaid — including large states like Texas and Florida — may see sharper premium increases, since more residents rely on marketplace plans.
• The ongoing government shutdown has become a direct factor: one of the main debate points in Congress is whether the next funding bill should include an extension of these subsidies.

(Sources: Axios, Investopedia, Rockefeller Institute of Government)

How Much Could ACA Premiums Increase?

Recent analyses highlight just how significant the cost changes could be:

• Axios reports that average marketplace premiums could jump by 114% if subsidies end at the close of 2025.
• Investopedia adds that insurers are already filing rate requests showing a median increase of 18% for plan year 2026 — the largest in about seven years.
• The Bipartisan Policy Center estimates that for a family of four earning around 140% of the federal poverty level, what costs $0 per month in 2025 could increase to about $1,600 annually without subsidy renewal.
• In non-Medicaid expansion states like Texas, premiums could increase over 100% in some regions.

(Sources: Axios, Investopedia, Bipartisan Policy Center, Houston Chronicle)

Why Subsidies Are Central to the Debate

The enhanced ACA credits were part of pandemic-era relief efforts under the American Rescue Plan Act, later extended by the Inflation Reduction Act. These credits expanded eligibility above 400% of the federal poverty level and capped how much of a household’s income could be spent on health insurance premiums.

• Supporters argue that allowing these subsidies to expire could reduce affordability, lead to more uninsured Americans, and destabilize the ACA marketplace.
• Critics counter that the subsidies are expensive — costing hundreds of billions over time — and were never intended to be permanent.

The debate has now become part of the larger government shutdown standoff, as lawmakers negotiate how (or whether) to extend the credits beyond 2025.

(Sources: Bipartisan Policy Center, Cato Institute, National Women’s Law Center, Rockefeller Institute of Government)

What Consumers Should Watch

1. Congressional Action:
   Monitor whether any continuing resolution or federal budget package includes an extension of the enhanced premium tax credits.
2. Insurance Rate Filings:
   State insurance regulators will begin reviewing proposed 2026 rates soon, which may reflect assumptions about whether subsidies continue.
3. Open Enrollment Periods:
   ACA open enrollment for 2026 coverage begins in November 2025. Consumers should compare plans carefully and review updated premium amounts.
4. State-Level Responses:
   Some states may consider temporary assistance programs if the federal subsidies lapse, though such measures vary widely.

Staying Informed and Prepared

If you currently have a marketplace plan, this is a good time to:

• Stay informed on Congressional updates about subsidy extensions.
• Review your budget and prepare for potential premium changes in 2026.
• Use official resources like gov or your state marketplace to compare options during open enrollment.
• Be cautious of misinformation or sales pitches — only enroll through official, licensed channels.

(Note: This article is for informational purposes only and does not provide financial or insurance advice.)

Final Thoughts

The potential expiration of enhanced ACA subsidies, combined with an ongoing government shutdown, represents one of the most significant challenges to affordable health coverage since the ACA was introduced.

If Congress does not act, millions of Americans could face higher health insurance premiums, reduced affordability, and potential disruptions in coverage.

The bottom line: Stay proactive, stay informed, and use trusted resources to prepare for possible changes in the coming year.