The Congressional Budget Office released a critical analysis today demonstrating the profound consequences lawmakers face as enhanced health insurance subsidies approach their December 31, 2025 expiration date, with millions of Americans potentially losing coverage and facing dramatic premium increases.
The CBO’s September 18 letter to Democratic Senate leaders outlines three major policy options with significant fiscal and coverage implications. If enacted together by September 30, 2025, these measures would increase federal deficits by approximately $662 billion over the next decade while extending health insurance to 7 million additional Americans by 2035.
The analysis addresses three specific proposals requested by Senate Democratic Leader Chuck Schumer and ranking members Bernie Sanders, Jeff Merkley, and Ron Wyden:
Permanently extending the expanded premium tax credit structure would increase deficits by $350 billion from 2026 to 2035 while providing health insurance to an additional 3.8 million people by 2035. These enhanced credits, originally established under the American Rescue Plan Act of 2021 and extended through 2025, have enabled record enrollment of 24.2 million people in marketplace plans this year.
Nullifying a June 2025 Department of Health and Human Services rule affecting marketplace operations would add $40 billion to deficits while covering an additional 300,000 people. This rule made several changes to marketplace enrollment periods, verification procedures, and payment requirements that critics argue make coverage less accessible.
Repealing sections of the 2025 reconciliation act that restrict marketplace eligibility would increase deficits by $272 billion while extending coverage to 2.9 million more people. These provisions primarily limit access for certain immigrant groups and impose new verification requirements.
The analysis reveals consequences if Congress fails to act on the enhanced premium tax credits. Without extension, enrollees would face an average premium increase of more than 75 percent. Specific examples include a family of four earning $64,000 facing $2,600 in additional annual premiums, while a 60-year-old couple earning $80,000 would pay nearly $17,500 more per year.
The CBO estimates that 4.2 million people would lose coverage entirely if the enhanced credits expire. This loss stems from the credits’ role in making insurance affordable for middle-income families who previously couldn’t access meaningful subsidies.
Insurance companies across multiple states have already factored the subsidy expiration into their 2026 rate filings, with projected premium increases ranging from 1 to 7 percent on top of normal annual increases. The average impact across insurers quantifying the effect is approximately 4 percent.
These increases reflect insurers’ expectations that healthier, younger enrollees will drop coverage due to higher costs, leaving behind a sicker, more expensive risk pool.
The CBO emphasizes that timing matters significantly for policy implementation. Enacting changes by September 30, 2025, would allow insurers to adjust 2026 premiums accordingly and provide enrollees with predictable costs during the November 1 open enrollment period.
Delays beyond this date would reduce both the fiscal cost to the government and the coverage benefits, as insurers would be unable to incorporate changes into their rate structures for the upcoming plan year.
More than 90 national medical organizations, led by the American Medical Association, have urged congressional leadership to extend the enhanced credits, warning that expiration would destabilize marketplaces and increase uncompensated care costs for physicians nationwide.
