The Affordable Care Act (ACA) is about to get more expensive for millions of Americans and it all comes down to what didn’t make it into the One Big Beautiful Bill.
As part of our Breaking Down the One Big Beautiful Bill series, we’re taking a closer look at one of the hottest issues: healthcare. Starting in 2026, premiums for ACA marketplace plans are projected to increase significantly. The reason? The bill does not extend the expanded premium tax credits that were first introduced during the pandemic.
The Role of Premium Tax Credits
These enhanced credits have played a major role in making coverage affordable for people who don’t receive insurance through an employer such as students, gig workers, freelancers, and early retirees.
Currently, more than 22 million Americans rely on those subsidies to reduce their monthly premiums. On average, enrollees saved about $700 in 2024 thanks to the enhanced credits. Without congressional action, however, those savings will disappear at the end of 2025.
The “Subsidy Cliff” Problem
If the credits expire, many people will face what experts call the “subsidy cliff.” Under the old rules, tax credits were only available to individuals making up to 400% of the federal poverty level. Pandemic-era changes removed that cap, allowing more middle-class families to qualify.
With the expansion set to expire, anyone whose income exceeds the threshold, even by just one dollar, could suddenly lose their entire credit. For many households, that means paying hundreds more per month for the same coverage.
Financial Pressure on Families
This change will force families to watch their incomes more carefully than ever before. Even small shifts in annual income, whether from a bonus, overtime, or freelance work, could push someone past the eligibility line and dramatically increase their healthcare costs.
Financial planners note that there are some strategies to help soften the blow, such as shifting income, maximizing deductions, or contributing to a Health Savings Account (HSA). Still, for most people, the expiration of these credits will translate to higher costs, more planning, and fewer options.
What the Bill Does and Doesn’t Do
The One Big Beautiful Bill makes the 2017 tax cuts permanent, but it does not protect the expanded healthcare subsidies that made insurance more affordable for millions. Unless Congress steps in before the end of 2025, many households will feel the impact directly in their healthcare bills.
For families already stretched thin by rising living costs, this change could be a major financial setback.
