Will I Lose My Health Care Marketplace Subsidies?
This past weekend I completed the Affordable Care Act Marketplace enrollment application to see what was happening with the subsidies. All I’ve heard for months is that subsidies are going away and insurance premiums will be higher in 2026. And what I found out isn’t as cut and dry as I thought it would be.
And if you’re doing the same thing (or soon will be), knowing what’s happening, why it’s happening, and how it affects your budget will make you feel less blindsided. Here’s how it broke down for us (and, by extension, what it means for maybe many of you).
In this article:
Why Are Marketplace Subsidies Changing?
Why Are Insurance Premiums Going Up?
Who Will Be Affected By The Subsidy Changes
Who Won’t Be Affected By the Subsidy Changes
What Insurance Subsidies and Premiums Look Like For a Middle-Income Family of Three
Why Are Marketplace Subsidies Changing?
The premium tax credit (subsidies) started when the ACA became law in March 2010. Originally, these credits only went to people making between 100% and 400% of the federal poverty level (FPL) who bought insurance through the Marketplace. If you made a dollar over that limit, you were out of luck.
Then the American Rescue Plan in 2021 changed the rules and made coverage a lot more affordable for a lot more people:
It temporarily removed the 400% income cap, so that households earning more than that could still qualify for premium tax credits.
It increased the subsidy amounts so that no one had to spend more than about 8.5% of their income on the benchmark plan.
The Inflation Reduction Act later extended those enhanced subsidies through 2025, but that’s where the clock stops. At least for now. Unless Congress steps in again, we’re going back to the old rules in 2026.
That means many people will pay a lot more. Estimates say premiums could jump 75% or more for some households once the extra help disappears. Those just above the subsidy line will feel it the most.
The One Big Beautiful Bill Act made changes; just not for the people it claims to help. Instead of expanding care, it tightens the screws. Medicaid gets slapped with work requirements and extra cost-sharing. The ACA Marketplace loses its safety net, with automatic re-enrollment scrapped.
Beautiful for the budget maybe, but brutal for real people.
Why Are Insurance Premiums Going Up?
For 2026, all health insurance plans are set to rise around 7% on average, with some states seeing increases closer to 15–18%. Even those with employer-sponsored health insurance can expect higher premiums and costs.
The official reason is “rising health care costs.” Hospitals, drug companies, and medical staff are charging more because everything, from supplies to salaries, costs more. Insurers have to keep profits up, so they raise premiums.
Related: A Guide on Life Insurance and Financial Support for Parents
Basically, everyone’s trying to cover their own rising costs, and it trickles down to you. So, when you see your new premium jump and your deductible barely budge, it’s the system recalibrating itself at your expense.
Who Will Be Affected By The Subsidy Changes
If the rules revert to pre-enhancement levels, those with household incomes above 400% of the Federal Poverty Level will lose eligibility entirely (the “cliff” returns).
Here are the income limits (400% FPL) based on household size (number of people):
1 person = $62,600 ($78,200 in Alaska, $71,960 in Hawaii)
2 people = $84,600 ($105,720 in Alaska, $97,280 in Hawaii)
3 people = $106,600 ($133,240 in Alaska, $122,600 in Hawaii)
4 people = $128,600 ($160,760 in Alaska, $147,920 in Hawaii)
5 people = $150,600 ($188,280 in Alaska, $173,240 in Hawaii)
6 people = $172,600 ($215,800 in Alaska, $198,560 in Hawaii)
7 people = $194,600 ($243,320 in Alaska, $223,880 in Hawaii)
8 people = $216,600 ($270,840 in Alaska, $249,200 in Hawaii)
But households making four times the FPL aren’t the only ones who will have higher costs. Lower- and moderate-income households will be expected to pay a larger share of income toward a benchmark plan.
The lower your Modified Adjusted Gross Income (MAGI) is relative to the FPL for your household size, the lower you’re expected to pay as a percentage of your MAGI.
Less than 133% FPL, 2.1% (up from 0%)
133% – 150% FPL, 3.14% – 4.19% (up from 0%)
150% – 200% FPL, 4.19% – 6.6% (up from 0% – 2%)
200% – 250% FPL, 6.6% – 8.44% (up from 2% – 4%)
250% – 300% FPL, 8.44% – 9.96% (up from 4% – 6%)
300% – 400% FPL, 9.96% (up from 6% – 8.5%)
> 400% FPL, Unlimited (up from 8.5%)
Medicaid enrollees with incomes more than 100% of the FPL may see higher cost-sharing on copayments, deductibles, and coinsurance. So, in short, everyone is paying more, whether because of lower subsidies or higher premiums.
Who Won’t Be Affected By the Subsidy Changes
Not everyone’s premiums are tied to Marketplace subsidies, so some households will barely notice the change. If you fall into one of these groups, you can probably exhale.
Medicaid and CHIP enrollees: Adults earning less than 100% of the FPL won’t lose benefits because Medicaid eligibility is determined by state programs, not federal subsidies. And the Children’s Health Insurance Program (CHIP) runs separately from the Marketplace, so kids enrolled there won’t see any immediate impact.
Medicare beneficiaries: If you’re 65 or older or otherwise covered through Medicare, these subsidy adjustments don’t apply to you.
People in states with supplemental subsidies: A few states (like California, Massachusetts, and Vermont) have their own premium assistance programs that extend help beyond federal limits. Depending on where you live, your state might step in to cushion the loss when the federal boosts expire.
While many Marketplace users will feel the squeeze, these exceptions mean millions of Americans won’t see major shifts in how they access or pay for care. Knowing where your coverage fits in helps you plan without unnecessary panic.
What Insurance Subsidies and Premiums Look Like For a Middle-Income Family of Three
Here’s the personal slice of this insurance pie for my household. I figure sharing our exact numbers helps make the abstract concrete.
Current Plan (before change):
Premium: $977.24/month
Subsidy: $713 (based on income $65,000)
Net we pay: $264.24/month
Deductible: $5,300
Out-of-pocket maximum: $6,300
New Plan (for upcoming year):
Premium: $1,437.52/month
Subsidy: $1,046 (based on income $53,208)
Net we pay: $391.52/month
Deductible: $2,000
Out-of-pocket maximum: $4,000
So, yes, our premium payment goes up by $127.28 a month, but we’re getting significantly lower cost-sharing, as the deductible drops $3,300 and out-of-pocket max drops $2,300. It’s a higher monthly payment, but better protection if something unexpected happens.
