The end of enhanced Obamacare credits during the Biden administration has had little effect on total premiums in 2026, countering Democratic assertions that this change is behind rising health insurance costs.
Recently, Democrats pushed for a government shutdown, largely due to the upcoming expiration of the enhanced Obamacare credits from Biden’s $1.9 trillion relief package, the American Rescue Plan. These credits were briefly extended under the Inflation Control Act.
Paragon Health Research Institute indicates that for 2026, the benchmark interest rate application shows that Biden stated the lapse of the coronavirus-related credits “only accounts for 4% of the 20% average premium rise expected for next year.”
“In essence, the sharp increase in premiums can’t be solely attributed to the expiration of these enhanced subsidies; the underlying issues remain constant,” Gabriel Kalish, program manager at Paragon Institute, explained, referring to “structural defects” that have affected Obamacare since its inception in 2014.
Kalish added:
For a typical ACA enrollee, specifically a 50-year-old with an income at 200% of the federal poverty line, the premium for 2025 is projected at $8,326. In 2026, premiums are expected to rise by an average of 20%, pushing the base premium to $9,991. Out of the total $1,665 increase, $333 (or 4%) is attributed to the end of these COVID credits. The remaining $1,332 (or 16%) stems from other factors influencing premium hikes. To put it in perspective, 83.3% of the 2026 premium is based on 2025 figures, with just a small fraction—3.3%—attributable to the expiration of COVID-related credits.
Insurers attribute these premium increases to factors like increased health care use, inflation, and sector consolidation, alongside rising costs for expensive medications, including weight loss drugs and treatments for complex conditions. They also noted labor shortages and pricing transparency measures as minor contributors to these hikes.
Moreover, “Under the COVID-19 credits, the government has been covering 93% of a typical enrollee’s premium. After these credits expire, over 80% will still be covered by the federal government,” she mentioned, pointing out the ongoing financial dependence on taxpayer funding for insurance firms offering ACA plans.
Brian Blaze, who previously held a senior role in the Trump administration, noted the significant increase in premiums since the ACA’s implementation.
House Ways and Means Committee Chairman Jason Smith (R-Missouri) remarked that these expanded credits benefit wealthier Americans and financially support large insurance corporations.
As Smith observed, the press release highlights that the richest Americans stand to gain from these subsidies.
- Increase your premium tax credits without income limitations, which lessens the financial burden on high-income enrollees in costly regions.
- A family in Prescott, Arizona, earning $600,000 can qualify every year.
- A couple in West Virginia making $580,000 is similarly eligible.
- An individual in Vermont with an income of $180,000 also qualifies annually.
“The enhanced subsidies extend financial assistance to individuals earning between $129,000 and $600,000 a year; these truly become Obamacare subsidies for the affluent,” said Michael Cannon, director of health policy research at the Cato Institute.
