Brace for Impact: ACA Premium Tax Credits Set to Shrink in 2026 and how this will affect PENNIE Plans.
Pennsylvanians on PENNIE Plans Could See Higher Premiums Without Action
May 27, 2025
The Affordable Care Act (ACA) has been a lifeline for millions, offering subsidized health insurance through Advanced Premium Tax Credits (APTCs). However, significant changes are on the horizon.
What's Changing?
The enhanced APTCs, introduced under the American Rescue Plan Act (ARPA) and extended by the Inflation Reduction Act (IRA), are scheduled to expire at the end of 2025. These enhancements expanded eligibility and increased subsidy amounts, making healthcare more affordable for many. Without congressional action to extend these provisions, the original ACA subsidy structure will resume in 2026.Center for American Progress
Note: The information provided is based on current projections (as of May 2025) and may change pending legislative actions.
Potential Impacts on Premiums and Coverage
Increased Premiums: The expiration of enhanced APTCs could lead to substantial premium hikes. For instance, a 40-year-old with an income of $31,000 might see monthly premiums rise from $58 to $153—a 165% increase. KFF+1KFF+1
Coverage Losses: The Congressional Budget Office projects that approximately 4 million individuals could lose their health insurance coverage in 2026 due to increased costs. Business Insider
Market Instability: Higher premiums may lead healthier individuals to forgo insurance, resulting in a risk pool with sicker individuals and potentially driving premiums even higher. Commonwealth Fund
Who Will Be Most Affected?
Middle-Income Earners: Those with incomes just above 400% of the federal poverty level will lose eligibility for subsidies, facing the full cost of premiums.
Older Adults: Older individuals often face higher premiums, and the loss of enhanced subsidies could make coverage unaffordable.
Residents in Non-Expansion States: States that haven't expanded Medicaid may see a significant increase in uninsured rates. KFF+2Commonwealth Fund+2Commonwealth Fund+2
What Can You Do?
Stay Informed: Keep abreast of legislative developments regarding the extension of enhanced APTCs.
Review Your Coverage: Assess your current health insurance plan and consider how changes might affect your premiums and out-of-pocket costs.
Consult a Professional: Speak with a licensed insurance advisor to explore your options and find the most cost-effective coverage.
Resources for Further Information
Commonwealth Fund: Enhanced Premium Tax Credits for ACA Health Plans
KFF: How Much More Would People Pay in Premiums if the ACA's Enhanced Subsidies Expired?
Congressional Budget Office: The Effects of Not Extending the Expanded Premium Tax Credits
If you need assistance navigating these changes or exploring your health insurance options, feel free to contact us for personalized guidance.