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Key Takeaways
- If enhanced premium tax credits expire, Americans could see their Marketplace health insurance (Obamacare) premiums jump by thousands of dollars in 2026.
- Middle-income early retirees who aren’t yet eligible for Medicare are especially vulnerable, as they often rely on Marketplace plans and already face higher age-based premiums.
- A 60-year-old earning $62,700 a year—which is just above the threshold for subsidy eligibility if the enhancements are not extended—would pay nearly $9,600 more annually. A 64-year-old with that income would pay roughly $11,000 more annually.
With open enrollment for health insurance through the Affordable Care Act Health Insurance Marketplace starting on November 1, older adults may be in for a rude awakening when they see the cost of their monthly premiums for 2026.
A recent analysis by KFF, a nonprofit health policy organization, found that a 60-year-old who earns $62,700 a year—which is just above the threshold for subsidy eligibility—would pay nearly $9,600 more annually if an expansion of premium tax credits expires, and premiums increase by the amount projected by insurers.
Eligibility for premium tax credits, which are subsidies that reduce the cost of monthly health insurance premiums, was expanded by COVID-19-era rules, providing many enrollees with larger tax credits and allowing more people to qualify. More than 90% of shoppers qualified for a tax credit in 2024. Those rules are set to expire at the end of this year, increasing the cost of health insurance premiums for many.
How This Impacts You
With Democrats and Republicans in Congress currently facing an impasse over whether these subsidies should expire, early retirees, especially, may notice that the cost of their monthly health insurance premiums for 2026 are substantially higher when open enrollment starts on November 1.
Early retirees are especially at risk. They may not be eligible for Medicare yet (eligibility typically starts at age 65) and since they’re no longer working, they don’t receive insurance through an employer.
As a result, they may be reliant on health insurance from the ACA Marketplace. Plus, since insurers typically already charge older adults higher premiums, this group is especially vulnerable to premium spikes starting next year, according to KFF.
In its analysis, KFF found that a 64-year-old earning $62,700 would pay $11,000 more annually. In contrast, a 50-year-old making that amount would pay an additional $4,500 annually.
Before 2021, the premium tax credits were only available to households making less than 400% the federal poverty level, but these subsidies were expanded in 2021. The enhanced subsidies were then extended through the end of 2025 under the Biden administration’s Inflation Reduction Act.
But it’s not just older adults who will be impacted. “The majority of people receiving ACA coverage receive advanced premium tax credits, and so most people will be impacted by the expiration of these tax credits,” Lynne Cotter, senior health policy research manager for KFF, told Investopedia in an August interview.
The federal government has been shut down for more than three weeks as Democrats and Republicans in Congress face a stalemate regarding the status of these ACA subsidies.
Democrats have said they won’t reopen the government until Republicans agree to extend the subsidies, while Republicans have said they won’t negotiate the issue until the government is reopened.
