A new KFF analysis shows premium costs would surge nationwide if enhanced ACA tax credits expire, with the steepest spikes hitting Wyoming, West Virginia and Alaska.
This analysis was originally published by KFF, a nonprofit health policy research, polling and news organization, under the headline “Mapping the Uneven Burden of Rising ACA Marketplace Premium Payments due to Enhanced Tax Credit Expiration.”
The Affordable Care Act (ACA) offers premium tax credits to help make health insurance more affordable. Under original Affordable Care Act provisions, an income cap for premium tax credits was set at 400 percent of the federal poverty level. Above that threshold, federal financial assistance was not available, creating a “subsidy cliff.”
The American Rescue Plan Act (ARPA) and later the Inflation Reduction Act (IRA) temporarily expanded eligibility for tax credits to people with incomes over 400 percent of poverty, in addition to providing more generous support for people at lower incomes.
Enhanced premium tax credits expire at the end of this year. Enrollees currently receiving premium tax credits at any level of income will see their federal assistance decrease or disappear if enhanced premium tax credits expire, with an average increase of 114 percent to what enrollees pay in premiums net of tax credits.
Since premium payments are capped based on income and family size, there is little geographic variation in the resulting increases in premium payments for enrollees with incomes below 400 percent of poverty. Out-of-pocket premiums for people with incomes below 400 percent of poverty will increase by hundreds of dollars to over $1,500 per person on average.
Among those with incomes over 400 percent poverty who are losing the tax credit altogether, the impact will be greatest for those whose unsubsidized premiums are highest: older Marketplace enrollees and those living in higher-premium locales. Among enrollees with incomes over 400 percent of poverty, just over half are between ages 50 and 64, and will therefore have high unsubsidized premiums.
The maps below show how much average premium payments would increase for 2026 benchmark silver plans with the expiration of enhanced premium tax credits at four income levels above an income cap of 400 percent of federal poverty for a 40-year-old and 60-year-old individual, namely 401 percent, 501 percent, 601 percent and 701 percent.
Among these four income levels, enhanced tax credits provide the most financial assistance for those at 401 percent of poverty, which represents an annual salary of $62,757 for an individual in the contiguous United States.
Because the cost of living is higher in Alaska and Hawaii, 401 percent of federal poverty is $78,396 and $72,140 for individuals there, respectively.
In 46 states and the District of Columbia, a 60-year-old at 401 percent of poverty will see their average annual premium payment for a benchmark silver plan at least double without enhanced tax credits.
In 19 states, this person would see their premium payment at least triple on average for a benchmark silver plan, consuming more than 25 percent of annual income.
States with the highest premium payment increases due to expired enhanced tax credits for a 60-year-old at 401 percent of poverty purchasing a benchmark silver plan are Wyoming ($22,452 increase per year), West Virginia ($22,006), and Alaska ($19,636).
The smallest increases caused by the loss of enhanced tax credits for what enrollees pay annually for the benchmark silver plan are in New York ($4,469), Massachusetts ($4,728) and New Hampshire ($4,877).
At 501 percent of poverty ($78,407 in the contiguous U.S., $97,946 in Alaska, $90,130 in Hawaii), expiration of enhanced premium tax credits would at least double average premium payments for a benchmark silver plan in 37 states and the District of Columbia for a 60-year-old.
At 601 percent of poverty ($94,057 in the contiguous U.S., $117,496 in Alaska, $108,120 in Hawaii), 19 states would see the average benchmark silver premium payments at least double for a 60-year-old if enhanced tax credits expire.
At 701 percent of poverty ($109,707 in the contiguous U.S., $137,046 in Alaska, $126,110 in Hawaii), the average benchmark silver premium payment would be at least twice as high in five states without enhanced tax credits for a 60-year-old.
The impact on a 40-year-old is more modest at all income levels.
Existing premium differences lead to variation in premium payments with the expiration of the enhanced premium tax credits at the congressional district level as well.
For people with incomes over 400 percent of poverty, there will be smaller premium payment changes for 40-year-old enrollees and larger changes for 60-year-old enrollees, for whom plans are more expensive.
Editorial Note: Originally published on Nov. 13, this brief was revised on Nov. 24 to provide additional analysis on the effects of enhanced premium tax credit expiration for those at 701 percent of poverty.
Justin Lo is a senior researcher for the Program on Patient and Consumer Protections and the Program on the ACA. In this role, he focuses on the impact of health policy on patients’ experience with health care and marketplace insurance. Prior to joining KFF, he worked at Epic Systems, where he supported health systems in achieving their population health management objectives and conducted clinical epidemiologic studies using electronic health records.
Jared Ortaliza is a policy analyst at KFF for the Program on the ACA, where he analyzes economic and policy research on the ACA Marketplaces, including Marketplace enrollment, costs and affordability.
Prior to joining KFF, he was an outbreak investigator for the Los Angeles County Department of Public Health. Jared graduated from University of California, Los Angeles with a B.S. in Human Biology and Society.
Cynthia Cox is a vice president and director of the Program on the ACA, where she conducts economic and policy research on the Affordable Care Act and its effects on private insurers and enrollees. Her work focuses on enrollment, pricing and competition in the ACA’s exchange markets.
Cox also directs the Peterson-KFF Health System Tracker, a partnership of the Peterson Center on Healthcare and KFF aimed at monitoring the performance of the U.S. health system over time and in relation to other large, high-income countries. Her work on this project focuses on trends in health care costs, access and affordability, as well as measures of health care quality and outcomes.
Imani Telesford is a research associate at KFF for the Program on the ACA and the Peterson-KFF Health System Tracker, where she conducts policy research on the Affordable Care Act (ACA) and its effects on private insurers and enrollees, as well as analyses on health spending, quality of care, access, and affordability in the United States and international comparisons.
Prior to joining KFF, Imani graduated from Cornell University with a bachelors in health care policy. While at Cornell, Imani was a member of Cornell’s varsity gymnastics team. She was also a member of Tristan Lambert’s research lab where she assisted in projects focused on aromatics ions and organic synthesis reactions. Imani worked alongside Dr. Erin Jant as well in conducting a study at the Ithaca Sciencenter examining ways to build conversation and learning through care-giver child interactions.
Lynne Cotter is a senior health policy research manager for the Program on the ACA and works on the Peterson-KFF Health System Tracker, monitoring healthcare costs over time. Prior to joining KFF, she worked as a research scientist at the Wisconsin Department of Health Services, analyzing health care trends and innovating methods of health communication to support data-informed policy changes.
Dr. Cotter completed her doctorate in Mass Communication at the University of Wisconsin Madison’s School of Journalism and Mass Communication with a minor in psychology. She received her bachelor’s degree from Cornell University in nutritional science with a minor in global health and a Master of Public Health degree from The Dartmouth Institute of Health Policy and Clinical Practice.
Matt McGough is a policy analyst at KFF for the Program on the ACA and the Peterson-KFF Health System Tracker, where he conducts policy research on the Affordable Care Act (ACA) and its effects on private insurers and enrollees, as well as analyses on health spending, quality of care, access, and affordability.
Prior to joining KFF, Matt worked as a research assistant for the Child and Adolescent Health Measurement Initiative (CAHMI) and worked on the National PrEP Program Research Team at the Johns Hopkins Bloomberg School of Public Health.
Matt holds a bachelor’s degree and Master of Science in Public Health (MSPH) both from Johns Hopkins University.
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