Dec 20, 2025
Along with holly and mistletoe, millions of Americans are likely spending the holiday season with health insurance anxiety hanging over their heads.
That’s because, in a move that may have earned many lawmakers a lump of coal from Santa this year, the Senate and House failed to extend the Affordable Care Act enhanced premium tax credits (ePTCs), or agree on a suitable alternative to replace them, before adjourning for their holiday break on December 18 (1).
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As a result, about 22 million of the more than 24 million Americans enrolled in ACA Marketplace plans will effectively see their health care coverage revert back to the old, pre-COVID standards (2).
The ePTCs, which the Biden administration introduced in 2021 in response to the pandemic, pushed monthly premiums down and cut out-of-pocket costs — especially for those living below 400% the Federal Poverty Level (FPL) — while extending benefits to enrollees making more than 400% of the FPL. The 2022 Inflation Reduction Act continued these subsidies through 2025 (3).
The ePTCs, however, expire on New Year’s Day, meaning those living below 400% of the FPL will receive fewer subsidies on premiums while those above 400% of the FPL could fall off the subsidy cliff — the result of both a loss of ACA subsidies and a simultaneous rise in premiums.
ACA Marketplace insurers were already expected to raise prices by an average of 26% in 2026 (4) but, without the ePTCs, the non-partisan Kaiser Family Foundation (KFF) reported that the average annual premium will jump 114% in 2026, from $888 to $1,904 (5).
“We really are talking about life and death,” Democratic Sen. Jon Ossoff told CNN about the effort to extend the ePTCs (6). “Maybe that gets lost sometimes in the drama inside the beltway. The vote that members cast, whether to extend these tax credits, means people will live or people will die.”
How the health care debate got so out of hand
The debate over extending the ePTCs was at the heart of the record-breaking 43-day government shutdown earlier this year. Democrats continuously pushed to renew the credits and Republicans refused, eventually winning out when eight Dems joined their GOP colleagues in reopening the government in exchange for a vote on the ePTCs in December.
The vote finally happened in early December, with a Democratic bill that called for a three-year extension of the credits, and a GOP bill that would axe them and instead give Americans up to $1,500 in a health savings account (HSA). Both failed to pass (7).
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On December 16, Speaker Mike Johnson shut down ePTC extension efforts after pushing a House GOP bill that neither extended the ePTCs nor provided money for HSAs, which made it unpopular even among some Republican lawmakers (8).
That bill, the “Lower Health Care Premiums for All Americans Act,” reduces premiums by 11% through 2035 but would also force 300,000 Americans per year off health insurance during the same period, according to the Congressional Budget Office (9). The House passed it by a narrow vote but it’s uncertain if the bill will pass the Senate — a vote that will occur in the new year.
At the same time, four centrist Republicans broke ranks to join Democrats in forcing a vote on a discharge petition to extend ePTCs for three more years. The House will vote on that in the new year as well, but many observers expect that it won’t pass a Republican-controlled Senate that is largely against extending ePTCs.
All of this played out against a backdrop of anxiety over how Americans across the country will pay for health coverage in 2026. The deadline to choose coverage that begins on January 1 passed on December 15, meaning those waiting to see how the situation played out before picking a plan will now have to decide by January 15 for coverage that begins in February.
Meanwhile, the Center on Budget and Policy Priorities (CBPP) crunched some numbers, warning that lower income Americans could bear the brunt of premium percentage increases.
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For example, it noted a person making $44,000 a year would see monthly premiums jump to $253 from $85, an annual increase of $2,013 (10). And those with income above 400% of the FPL will lose all subsidies and also face higher premiums. The CBPP used the example of a 60-year-old couple in West Virginia with earnings of $85,000 per year, finding their annual premium would jump roughly 650% from $7,225 to more than $54,000.
To compound on that, the government funding deadline at the end of January could spark another shutdown to try and force an extension of the ACA credits, bringing the country back to where it was during the record-length autumn shutdown with no progress made in the interim.
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What to do now
A KFF survey showed that more than half of ACA Marketplace enrollees “would not be able to afford an annual increase of $300 in health care expenses without significantly disrupting their household finances,” while 25% said a doubling of their premiums would likely lead to them dropping coverage altogether (11).
For those unable to maintain their usual level of coverage for 2026, it’s time to evaluate your best path forward. Here are a few options to consider:
High deductible plan paired with an HSA
This is a classic combination for those who don’t anticipate an illness or major health issues. The lower premiums are more manageable and the HSA can help you save for if/when you do need cash for coverage. That said, as health policy expert Nick Fabrizio explained (12), this approach, with its high deductible, is “not well-suited for people with chronic conditions like diabetes, heart disease, cancer.”
Pick a cheaper plan, or go without coverage
Both of these options could reduce costs significantly, with early signs pointing to many Americans taking this route. In terms of a cheaper plan, financial planner and author Jae Oh told FinStreamTV that it’s a good option for healthy individuals, and that “next year you can switch to a more robust plan if your probability of requiring health care services changes.”
He did warn about opting out of coverage entirely though (13). “The issue is that if something unpredictable occurs, the risk of ruin all of a sudden immediately materializes without you having the ability to react.”
Non-traditional health coverage
Oh also discussed alternative health care coverage options, like faith-based care, health sharing and short-term insurance. The first two involve shared medical costs among larger groups, while short-term insurance is designed as exactly that — a stopgap.
Oh cautioned, though, that while these options “can work,” they aren’t subject to the “guardrails” that regulate ACA plans. “Just know,” he added, “that your consumer protection rights under those plans are far thinner, far less robust than under the Affordable Care Act.”
Cut back on work
This sounds counterintuitive, but financial planner Jeffrey Levine told CNBC that hourly employees who make just enough money to creep above 400% of the FPL — and, thus, run the risk of falling over the subsidy cliff — should cut back on work in order to stay under the 400% and at least qualify for some ACA subsidies (14). “If someone is going to end up being $5,000 over the cliff,” he said, “they should literally just stop working.”
Preventative care
It’s the “apple a day keeps the doctor away” approach. Stay as healthy as possible and keep on top of annual medical checkups to reduce reliance on health coverage in the first place.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Politico (1); Harvard Kennedy School (2); The Commonwealth Fund (3); Kaiser Family Foundation (4, 5, 11); CNN (6); NBC News (7); ABC News (8); Congressional Budget Office (9); Center on Budget and Policy Priorities (10); CNBC (12, 14); FinStreamTV (13)
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Mike Crisolago is a Staff Reporter at Moneywise with more than 15 years of experience in the journalism industry as a writer, editor, content strategist and podcast host. His work has appeared in various Canadian print and digital publications including Zoomer magazine, Quill & Quire and Canadian Family, among others. He’s also served as a mentor to students in Centennial College’s journalism program.
