Millions Lose Health Insurance as US Subsidies Expire and Costs Soar
Millions of Americans face mounting healthcare costs and loss of coverage following the expiration of federal health insurance subsidies on January 1, 2026. According to Human Rights Watch and Oxfam America, the lapse of these enhanced premium tax credits—paired with the prioritize of wealth-focused tax cuts under the One Big Beautiful Bill Act (OBBBA)—has triggered a significant decline in marketplace enrollment and increased financial instability for middle-income households.
Why are health insurance costs rising for millions?
The primary driver of the current cost surge is the expiration of enhanced premium tax credits that previously capped health insurance premiums at 8.5 percent of household income. Data from KFF, a nonprofit health policy research organization, confirms that monthly marketplace premiums jumped approximately 58 percent this year, rising from an average of $113 to $178. According to Human Rights Watch, these hikes disproportionately impact older adults and individuals earning just above the 400 percent federal poverty level threshold, who are no longer shielded by the expanded subsidies.
In states like New Mexico, local policy interventions have partially or fully offset the premium increases, providing a buffer that is absent in most other parts of the country.
What is the impact of the OBBBA on healthcare access?
The OBBBA, enacted in July 2025, redirected federal fiscal priorities away from healthcare subsidies to fund tax cuts for the wealthiest 0.1 percent of households. Oxfam America reports that while the enhanced subsidies cost roughly $35 billion annually, the new tax cuts will save the ultra-wealthy approximately $50 billion per year over the next eight years. Jackson Gandour, a senior policy advisor at Oxfam, characterizes this policy shift as a “grossly misplaced” priority that fuels inequality by forcing ordinary citizens to choose between essential care and basic household expenses.
How are families adjusting to the loss of coverage?
Early indicators suggest millions have already lost their health insurance or transitioned to lower-quality, high-deductible plans. KFF reports that 9 percent of adults with marketplace coverage in late 2025 became uninsured by early 2026, with 80 percent of those individuals citing cost as the primary factor. Furthermore, the average deductible for marketplace plans has risen to $3,786, up from $2,759 in 2025. According to a study published in an American Medical Association journal, enrollees in high-deductible plans are statistically less likely to seek recommended medical care, creating a long-term risk for public health outcomes.
If you are struggling with rising premiums, contact your state’s insurance department. Some states have implemented supplemental programs to bridge the gap left by the expiration of federal subsidies.
What are the long-term trends for insurance enrollment?
Actuarial projections from Wakely Consulting Group suggest total marketplace enrollment could drop to as low as 16.5 million people this year, a decline of nearly 6 million from 2025 levels. Internal Centers for Medicare and Medicaid Services documents reported by NOTUS indicate a 21 percent decline in enrollment due to unpaid premiums in states using the federal marketplace. As families cut spending on food and clothing to cover insurance premiums, the overall economic strain on middle-income households continues to intensify, according to Human Rights Watch researchers.
Frequently Asked Questions
Why did the insurance subsidies expire?
The subsidies expired because Congress did not include an extension in the 2025 OBBBA, choosing instead to prioritize tax cuts for the wealthiest 0.1 percent of households.
Which groups are most affected by the subsidy cliff?
Older adults ineligible for Medicare and middle-income earners above the 400 percent federal poverty level have seen the steepest premium increases, according to KFF.
Are employer-sponsored plans affected?
Yes. The Federal Reserve Bank of New York reported that employee health insurance costs rose by an average of 12.9 to 14.2 percent in recent surveys of service and manufacturing firms, suggesting the loss of public subsidies is rippling through the private insurance market.
Have you experienced significant changes in your health insurance premiums this year? Share your story in the comments below or subscribe to our newsletter for ongoing updates on healthcare policy and economic trends.