A major problem looms as ACA subsidies end: experts warn of a dangerous “death spiral” in U.S. healthcare. With subsidies for Affordable Care Act plans set to lapse, many Americans relying on them may opt for plans with lower monthly premiums but much higher deductibles, or even drop coverage altogether. This shift could trigger broad, lasting damage across the healthcare system.
A recent KFF analysis estimates that the average annual premium for someone enrolled in an ACA plan could more than double—from about $888 this year to around $1,904 in 2026. Those steeper costs would ripple through the economy, affecting rural hospitals and people with employer-sponsored insurance as well.
Emma Wager, a senior policy analyst at KFF’s ACA program, emphasizes that when a large share of people drop marketplace coverage or become uninsured, the impact extends beyond the individuals directly affected. “It doesn’t just impact them; it impacts everyone.”
In 2021, amid the Covid-19 pandemic, Congress expanded ACA subsidies through the American Rescue Plan Act, boosting financial assistance for many who were already eligible. This temporarily boosted enrollment in marketplace coverage, a trend that could reverse as backups expire.
Despite lawmakers’ efforts, the proposed extension of the premium tax credits—sought by many Democrats and a small number of Republicans—failed to clear the Senate’s 60-vote threshold. A Republican alternative that would have broadened health savings accounts and offered up to $1,500 for basic coverage also did not pass.
Thus far, the expiration of subsidies has not yet reduced the number of people enrolling in ACA plans. The Centers for Medicare & Medicaid Services reported that 5.7 million individuals enrolled during the 2026 open enrollment period, a figure roughly in line with the previous year.
However, Natasha Murphy of the Center for American Progress notes that the full effects may not be visible until the open enrollment period ends on January 15. “We’ll really see who pays that first premium,” she says, suggesting that the initial sign-up decisions will reveal the true impact.
A KFF survey adds nuance: if subsidies lapse, about one in three of the 24 million adults who buy coverage through the ACA marketplace said they would choose a plan with lower premiums but higher deductibles and out-of-pocket costs. Meanwhile, roughly a quarter said they would be “very likely” to become uninsured.
Health economist Gerard Anderson from Johns Hopkins University explains that when premiums rise sharply, healthier people often leave the pool, leaving sicker individuals behind. He describes this as a death spiral in which the remaining participants’ higher costs threaten the sustainability of the insurance offerings, potentially leading insurers to withdraw or reduce access.
For those who become uninsured or carry high-deductible plans, paying medical bills during illness or injury could become a severe burden. Hospitals, especially smaller and rural facilities with slim margins, would face more uncompensated care and may struggle to stay financially viable. Some might respond by raising prices for everyone, including those with employer coverage.
Rural residents could see even steeper premium increases than urban residents if subsidies end, according to the Century Foundation. At the same time, many individuals who rely on ACA coverage live in districts represented by Republicans, highlighting a potential political dimension to the policy consequences.
As Emma Wager notes, many farmers, ranchers, and other rural residents depend on the ACA, and a sizable share of enrollees are in GOP districts. The policy split over extending subsidies could thus have tangible consequences for voters who once supported or continue to support the existing program.
What happens next remains contested: the expiration of subsidies is likely to change enrollment behavior, pricing, and hospital finances, with the most pronounced effects possibly delayed until after the current enrollment period ends. The central questions are who will bear the costs, how the patient pool will shift, and whether the healthcare system can adapt without broader government support.
What’s your take on subsidies ending? Should lawmakers revisit extension or pursue alternative reforms, or is it better to let market forces play out? Share your view in the comments.
