Bigger ACA subsidies cut what marketplace enrollees paid through 2025

The Affordable Care Act has always helped people who buy their own insurance pay their premiums, based on income. The American Rescue Plan made that help much bigger starting in 2021. The Inflation Reduction Act later extended it through 2025.

KFF’s example: a single person earning $28,000 paid about 1% of income, roughly $325 a year, for a benchmark plan with the enhanced credits, versus nearly 6% without them. For the first time, eligible people earning more than four times the poverty line could get the federal credit because their required contribution for that benchmark plan was capped at 8.5% of income. Enrollment hit a record of more than 24 million plan selections in 2025.

The marketplace figured each credit from expected income, and enrollees could apply it up front to lower their monthly bill. The enhanced credits ended after December 31, 2025. The House passed a three-year extension in January 2026, backed by every Democrat and 17 Republicans, but it stalled in the Senate. Paid enrollment in February 2026 was 12% lower than a year earlier, and people earning above four times the poverty line no longer qualify for any federal premium tax credit.

The larger credits came from Rep. Lauren Underwood’s Health Care Affordability Act and a bill by Sen. Jeanne Shaheen, and President Joe Biden put them in his American Rescue Plan. Democrats passed it without Republican votes in March 2021, as emergency relief paid for by borrowing. The 2022 extension was paid for by new taxes on large corporations and Medicare drug savings.