As of this writing, Congress is poised to pass a short-term funding bill to reopen the federal government—welcome news, especially for the federal employees affected by the shutdown. But there’s a notable catch: the proposal doesn’t include an extension of the Affordable Care Act (ACA) enhanced Advanced Premium Tax Credits (eAPTCs), leaving the future of individual market affordability in question for millions of Americans.
While the ACA has expanded coverage across the country, the enhanced tax credits (first introduced under the American Rescue Plan and extended by the Inflation Reduction Act) have been crucial in keeping health insurance within financial reach for many. If they expire after 2025, as they’re currently set to do, many Americans could once again find themselves making difficult choices around coverage and care.
Here’s what you need to know.
First: What are the enhanced Advanced Premium Tax Credits (eAPTCs)?
Advanced Premium Tax Credits (APTCs) lower monthly premiums for some people purchasing coverage through the ACA marketplace. The enhanced version expanded the reach of these subsidies.
Before 2021, premium subsidies were capped at households earning up to 400% of the federal poverty level. The eAPTCs removed that income limit and ensured that no enrollee paid more than 8.5% of their income toward premiums for a benchmark Silver plan.
The result? Record-high marketplace enrollment and dramatically improved affordability, especially for middle-income earners who may have previously been priced out of certain coverage but didn’t qualify for standard subsidies.
What happens if the eAPTCs expire?
The effects of the lapsed credits are already being felt, and most carriers have adjusted their rates preemptively. For millions of Americans, 2026 health insurance premiums could rise by an average of 114% nationwide, increasing monthly costs by hundreds, if not thousands, of dollars. The impact will likely be especially harsh for older adults and those in rural areas who could face even greater rate hikes.
Employers may also feel the ripple effects. As affordability becomes more challenging, more people may turn to their employers for coverage or financial support. According to the Urban Institute, an estimated 3.2 million individuals could seek employer-sponsored insurance if the eAPTCs expire, potentially forcing companies to make tough budgetary decisions or risk higher turnover as employees seek coverage elsewhere.
Looking ahead
The future of the enhanced APTCs remains tenuous, but the need for accessible coverage is not. Brokers and employers have a critical role to play in helping individuals navigate these potential changes and in ensuring access to care remains within reach.
For employers, this could mean exploring solutions that provide budgetary control while still prioritizing employee coverage. For brokers, it’s time to re-evaluate client strategies, prepare for shifts in enrollment, and help companies explore all available options, whether traditional group coverage or reimbursement-based options like Individual Coverage HRAs (ICHRA) or Qualifying Small Employer HRAs (QSEHRA).
We’ll continue to monitor policy developments and support our partners in building smarter, more sustainable health coverage solutions for everyone.
