Charles Gaba is a health care policy wonk, advocate, and blogger who mixes data analysis with snark at ACASignups.net, where this article first appeared. You can follow him on Threads, Bluesky, Mastodon, Spoutible, or X/Twitter.
In early 2021, Democrats in Congress passed and President Joe Biden signed the American Rescue Plan Act (ARPA), which among other things dramatically expanded and enhanced the original premium subsidy formula of the Affordable Care Act (ACA). The changes brought the financial aid sliding income scale up to the level it should have been in the first place more than a decade earlier.
In addition to beefing up the subsidies along the entire 100 percent to 400 percent of Federal Poverty Level income scale, the ARPA also eliminated the much-maligned “Subsidy Cliff” at 400 percent of the Federal Poverty Level. Before 2021, a household earning even $1 more than that amount had all premium subsidies cut off immediately, requiring middle-class families to pay full price for individual market health insurance policies.
COMPARING THE ORIGINAL ACA SUBSIDIES WITH ENHANCED SUBSIDIES
Here’s what the original ACA premium subsidy formula looked like compared to the current, enhanced subsidy formula:
Unfortunately, the ARPA’s subsidy enhancements were only in place for three years, originally scheduled to terminate effective December 31, 2023 (they were retroactive to the beginning of 2021).
The good news is that the Inflation Reduction Act (IRA), which Congressional Democrats and Biden enacted in 2022, bumped out the sunset date by another two years. The bad news is that this extension is currently scheduled to end effective December 31, 2025. Needless to say, with Donald Trump winning the presidency and Republicans about to gain a trifecta, it’s highly unlikely that Congress will further extend the IRA’s enhanced subsidies.
RUNNING THE NUMBERS FOR FOUR HOUSEHOLD SCENARIOS
I decided to run the numbers myself to get an idea of just how much health insurance premiums for real-world enrollees are likely to increase starting in January 2026, if the upgraded ARPA/IRA subsidies expire at the end of 2025.
For this analysis, I’m using four household scenarios, at several different income levels for each:
- a 50-yr old single adult earning between $20,000 and $70,000/year
- a 30-yr old single parent w/an 8-yr old child, earning between $20,000 and $90,000/year
- a 40-yr old couple w/2 children age 15 & 12, earning between $40,000 and $130,000/year
- a 64-yr old couple earning between $20,000 and $90,000/year
I should give a shout-out to KFF’s Subsidy Calculator, which made it easier for me to run these calculations than trying to do so directly via HealthCare.Gov or the state exchanges would have been.
I should flag several caveats:
- Both the Federal Poverty Levels (FPL) and average Benchmark Silver ACA premiums are as of 2025. For 2026, the first year that the impact of the enhanced subsidies ending would actually go into effect, FPL levels will be a bit higher, and the benchmark Silver premiums will likely be higher in most states as well due to normal factors like inflation/etc.
- In addition, the Congressional Budget Office just issued a new analysis which estimates that unsubsidized premiums will increase by an additional 4.3 percent on average nationally in 2026 if IRA subsidies expire in 2025. This would vary by state and carrier, but I’m tacking on an extra 4.3 percent to all Full Price estimates below.
- Benchmark Silver premiums vary widely from state to state, Rating Area to Rating Area, county to county and potentially even from zip code to zip code in some states. Not every plan is offered throughout an entire rating area, which can impact which Silver plan is considered the Benchmark for that area.
- I’m therefore picking a single zip code for each state…based on the capital cities. Note that the capital is also the largest city in some states but not in others.
- “Single Parent” and “Nuclear Family” scenarios: In some states, children under 19 are eligible for CHIP or Children’s Medicaid at a significantly higher household income level (in some states they’re eligible up to 200 percent of the Federal Poverty Level or more). These analyses don’t take that into account. [Editor’s note from Laura Belin: Iowa’s version of the Children’s Health Insurance Program, known as Hawki, is available to “children under the age of 19 whose countable family income is less than or equal to 302 percent of the FPL, who are not eligible for Medicaid and who are not covered under a group health plan or other health insurance.”]
- These analyses assume that the enrollees choose the benchmark Silver plan. In many cases they’d be better off choosing a Gold or Bronze plan (or even Platinum, although those aren’t available in most states).
WHAT IOWANS WOULD PAY WITH AND WITHOUT ENHANCED ACA SUBSIDIES
Keeping all that in mind, let’s look at how the scenarios play out. Note: “infinite” simply means that the net monthly premium for that household would go from $0 (free) to some number higher than $0…which technically means their premium would increase “infinity percent,” even if it only went from $0 to $1/month.
Instead of going alphabetically, I’ve decided to analyze the states from lowest to greatest net premium increases for the most dramatic case study (in most cases that’s for the 64-yr old couple).
Here’s how costs would change in IOWA, which ranks 8th lowest for net premium increases if enhanced ACA subsidies went away:
A few examples of the impact:
A single 50-yr old would see his net premiums jump by as much as 189 percent, while a single parent earning $50,000/year would go from paying $158/month to $299/month…a 90 percent increase.
That is almost quaint compared to a family of four earning $50,000/year, however, who would see a nearly ten-fold increase in their premiums from just $17 to $168/month.
Then there’s the 64-yr old couple earning $90,000/yr, who would have to shell out over $16,000 MORE per year for the same coverage. In fact, their monthly premium would more than triple to $2,007/month…which literally puts them off the chart below:
For what it’s worth, Iowa currently has 98,000 residents enrolled in subsidized ACA exchange plans (plus another 10,000 paying full price), and more than 292,000 enrolled in Medicaid via ACA expansion, broken out roughly as follows by Congressional district:
Top graphic is by Shark9208888, available via Shutterstock.