The Congressional Budget Office has delivered stark projections about the healthcare landscape, warning that millions of Americans could lose health insurance coverage and face significant premium increases if Congress fails to extend enhanced premium tax credits set to expire at the end of 2025.
CBO estimates that without extending the premium tax credits established under the American Rescue Plan Act, 2.2 million Americans will become uninsured in 2026 alone. The situation deteriorates further without permanent extension, with projections showing 3.7 million uninsured by 2027 and an average of 3.8 million uninsured annually through 2034.
Beyond coverage losses, CBO projects substantial premium increases for those who remain in ACA marketplace plans. Without extension through 2026, gross benchmark premiums are expected to rise by 4.3 percent. The long-term outlook is even more concerning, with premiums increasing 7.7 percent in 2027 and averaging 7.9 percent annually from 2026 to 2034.
Industry analysis suggests the impact could be even more severe. Health insurers are already proposing a median premium increase of 18% for 2026, the largest rate adjustment since 2018. KFF projects that net premiums paid by consumers could increase by more than 75% on average, with some regions seeing hikes as high as 90%.
The enhanced premium tax credits, originally established under the American Rescue Plan Act and extended through the Inflation Reduction Act, significantly expanded healthcare affordability. The CBO analysis identifies specific groups facing the greatest impact. Working families, small business owners, older Americans not yet eligible for Medicare, and rural residents who rely on marketplace plans as their primary coverage option face the steepest premium increases.
For households earning between 100-150% of the federal poverty level, average premiums could jump from $0 to $387 annually. Those earning between 150-200% of poverty could see increases exceeding 400%, with premiums rising from $180 to $905 annually. Families earning above 400% of the poverty line would lose all ACA subsidies, facing annual premiums of $6,490, up from $3,576.
Under the enhanced structure, benchmark plan premiums are capped at 8.5% of household income for eligible families. The credits have been instrumental in driving ACA marketplace enrollment from 11.4 million in 2020 to over 24 million in 2025.
Governors from 18 states have signed letters urging congressional leadership to extend the credits, emphasizing the economic implications beyond healthcare.
“If they expire, premiums will rise by thousands of dollars for many families, millions will lose coverage, and people will be forced to make impossible choices between paying for healthcare, rent, or groceries. Hard-working American families, older Americans not yet on Medicare, small business owners, and rural communities—where marketplace coverage is often the only option— will be hit the hardest. The timing couldn’t be more urgent. Insurers are already setting 2026 rates. If Congress acts quickly, states can lock in lower premiums and spare families a wave of sticker shock this fall. If not, the damage will be felt for years.”
The Governors are joined by leaders in the health care industry, including AARP, Blue Cross Blue Shield Association, Susan G. Komen and American Medical Association, who also submitted a letter urging Congress to extend the tax credit.
“Open enrollment for next year’s coverage begins November 1—100 days away. By October, millions of Americans will be “window shopping” and see the full extent of these soaring premiums for 2026. And already, many of the 24 million people enrolled in the 1 individual market are receiving letters informing them that to maintain their coverage they will need to find hundreds or thousands of dollars in already stretched family budgets. This is a crisis that can be avoided.”
