On September 30, 2025, the view from Capitol Hill in Washington, D.C., captured the tense atmosphere just a day before a potential government shutdown.
According to a recent report from KFF, a nonpartisan health policy research organization, health plans available through the Affordable Care Act (ACA) Marketplace could see their costs more than double in 2026 if current subsidies are allowed to expire at the year’s end.
This situation is adding to the ongoing deadlock in Congress that could lead to a federal government shutdown post-midnight on October 1, as both parties remain at an impasse over these enhanced subsidies.
These enhanced subsidies, also termed premium tax credits, have been crucial for approximately 22 million ACA subscribers, as they considerably reduce insurance premiums.
If these credits lapse, KFF estimates that those receiving them will face a staggering increase in premiums—from an average of $888 this year to $1,906 next year.
Democrats are advocating for the extension of these enhanced grants as part of negotiations to secure full funding for the government, while Republicans argue for discussions on these credits only after the Senate finalizes its funding approval.
What is the Enhanced Premium Tax Credit?
On September 30, 2025, House Minority Leader Hakeem Jeffries from New York plans to speak during a rally at the Capitol, highlighting the potential negative impact of a government shutdown on healthcare access.
The premium tax credit, which originated under the ACA, was originally available to households earning between 100% and 400% of federal poverty levels.
With the American Rescue Plan Act passed in 2021, the eligibility and amounts for these credits have been temporarily expanded, allowing some households with incomes exceeding 400% of the federal poverty level—like a family of four earning more than $128,600—to qualify.
Additionally, the law constrains the maximum amount that households need to pay for premiums to just 8.5% of their income.
The enhanced subsidies were further extended through the Inflation Reduction Act, signed by former President Biden in 2022.
KFF found that these subsidies saved the average recipient around $705 annually in 2024.
Other considerations from personal finance show how government closures can destabilize finances, impact workers’ preparation for shutdowns, and even create stress for car dealers due to IRS delays regarding electric vehicle tax credits.
KFF’s analysis also pointed to additional factors contributing to premium increases. One issue arises from changes made during the Trump administration about how tax credits are calculated, which suggests that subscribers will shoulder a larger share of the costs in 2026.
Moreover, insurance companies in the ACA marketplace are forecasting an 18% median increase in rates, marking the most significant rise since 2018, attributed to pressures like rising healthcare costs and the reduced subsidies.
KFF noted that the anticipated premium surge of 2026 will affect individuals across various income levels. For instance, a couple aged 60 with an annual income of $85,000 (roughly 402% of federal poverty levels) can expect their annual premium payments to exceed $22,600 next year, even after accounting for the anticipated credit changes.
Additionally, a 45-year-old earning $20,000 (about 128% of the federal poverty line) in a state without Medicaid expansion will see his benchmark health plan premiums jump from $0 to $420 annually, reflecting the aftermath of losing the premium tax credit extension.
