ACA Open Enrollment 2026: Rising Premiums and the Return of the Subsidy Cliff

If you buy your own health insurance through the Affordable Care Act (ACA) Marketplace, the 2026 plan year probably felt different — and more expensive. The short version: the temporary enhanced premium tax credits that made coverage dramatically cheaper from 2021 through 2025 expired at the end of 2025, and Congress has not enacted a replacement. As a result, subsidies shrank, the old income "cliff" came back, and premiums rose for millions of households.

For the people we serve most at TSM Life & Health — early retirees, the self-employed, and pre-Medicare adults age 50 to 64 — this matters a great deal. These are exactly the households that used ACA coverage to bridge the gap until Medicare at 65, and they're the group that often felt the sharpest price swings. This guide walks through what changed, what it means in real dollars, and how to think clearly about your options. Every figure below is linked to an authoritative government or research source so you can check it yourself.

What actually happened to the enhanced subsidies

Let's start with the fact that drives everything else. The ACA has always offered premium tax credits — subsidies that lower the monthly premium for people who buy Marketplace coverage. In 2021, the American Rescue Plan Act temporarily made those credits much larger and extended them to higher earners. The 2022 Inflation Reduction Act extended that enhancement through the 2025 plan year. Those beefed-up subsidies are what people mean by the "enhanced premium tax credits."

Because the enhancement was written as temporary, it carried a built-in expiration date: December 31, 2025. According to the Congressional Research Service, Congress did not pass legislation to extend it, so for the 2026 plan year the credits reverted to the smaller, pre-2021 ACA formula. In practical terms, subsidies got smaller and, for some households, disappeared entirely.

Politically, the fight isn't over. On January 8, 2026, the U.S. House of Representatives voted 230–196 to extend the enhanced credits for three years, with a handful of Republicans joining Democrats. But a House vote alone doesn't change the law — the Senate must pass the same bill and the President must sign it. As of this writing, that had not happened, and a competing Senate effort had failed to reach the 60 votes needed to advance. So the honest, accurate statement for 2026 is this: the enhanced credits lapsed, and the original ACA subsidy rules are back in force unless and until Congress acts.

The 400% subsidy cliff, explained

To understand the 2026 sticker shock, you have to understand the "subsidy cliff." The ACA measures your income against the federal poverty level (FPL). Under the original 2010 rules, premium tax credits were available only to households earning between 100% and 400% of FPL. Earn even one dollar above 400% and you got nothing — you paid the full, unsubsidized premium. That hard edge is the cliff.

The enhanced credits did two big things. First, they lowered the share of income people were expected to pay toward a benchmark plan across the board. Second — and this is the part higher earners felt most — they eliminated the 400% cliff entirely and instead capped the benchmark "silver" plan premium at 8.5% of household income, no matter how high the income. A 60-year-old couple earning modestly above the old cutoff, who would have received zero help under the original rules, could suddenly qualify for meaningful subsidies.

With the enhancement gone in 2026, both of those changes reversed. The Congressional Research Service notes that for 2026 the required contribution percentage rises to as much as roughly 9.96% of income, and — critically — the 400% FPL cliff is back. That's especially punishing for older pre-Medicare adults, because ACA premiums are allowed to be up to three times higher for a 64-year-old than for a 21-year-old. A couple in their early 60s just over the 400% line can face full-freight premiums that run into five figures a year.

The best way to see whether the cliff affects you is to run your own numbers. KFF publishes a free premium-tax-credit calculator that shows the difference between the enhanced and reverted rules for your age, income, and location. If you're close to the line, small, legitimate adjustments to taxable income can sometimes change the result — the kind of coordination we cover on our planning process page.

Why 2026 premiums jumped

Two separate things pushed 2026 costs higher, and it's worth keeping them apart because they affect you differently.

1. Insurers raised their sticker prices

Independent of subsidies, ACA insurers filed higher gross premiums for 2026. KFF's analysis of rate filings found insurers were raising premiums by an estimated 26% on average — the largest increase since 2018. The Peterson-KFF Health System Tracker put the median filed increase at about 18% across 312 insurers, up from just 7% the year before. Insurers pointed to rising medical and drug costs, some tariff-related uncertainty, and the expected loss of enhanced subsidies (which they assumed would pull healthier people out of the risk pool, raising costs for everyone left).

2. Shrinking subsidies raised your net cost even more

Here's the one that hit wallets hardest. Because the enhanced credits shrank, the amount you pay after subsidies — your net premium — rose far faster than the sticker price. KFF estimated that if enrollees kept the same plan, the average subsidized enrollee's annual premium payment would more than double — a 114% jump, from about $888 to $1,904 a year. In reality many people switched to cheaper plans or dropped coverage, so KFF's later look at actual 2026 data found the average net monthly payment rose about 58%, from $113 to $178. Either way, it was a large, real increase.

It wasn't only premiums. Deductibles climbed too, as many enrollees traded down to cheaper "bronze" plans. KFF found the average deductible rose from $2,759 in 2025 to $3,786 in 2026 — a $1,027 jump and the steepest since the Marketplace launched. The lesson: when you compare plans, look at the total picture — premium, deductible, and out-of-pocket maximum — not just the monthly premium.

Record enrollment — and what comes next

The enhanced credits worked, at least in the sense of getting people covered. Marketplace enrollment roughly doubled during the enhancement years, reaching a record 24.2 million plan selections for 2025, according to the Centers for Medicare & Medicaid Services (CMS), including 3.9 million people new to the Marketplace.

With subsidies shrinking, that trend reversed. KFF projects average 2026 effectuated enrollment of roughly 17.5 million — about 4.8 million fewer people, a 21.5% drop. And the Congressional Budget Office estimated that letting the enhanced credits expire would raise the number of uninsured Americans by an average of about 3.8 million people each year from 2026 through 2034. Numbers like these are why the issue remains a live debate in Washington.

Open Enrollment dates & Special Enrollment Periods

You can only enroll in or change a Marketplace plan during set windows. For 2026 coverage, Open Enrollment ran from November 1, 2025 through January 15, 2026 on HealthCare.gov, the traditional Nov 1–Jan 15 window.

Going forward, the window is getting shorter. Under recent federal Marketplace rules, the enrollment period is being trimmed. For 2027 coverage, the federal Marketplace is scheduled to run November 1 to December 15, 2026 — about a month shorter than before. State-run marketplaces (some states operate their own) may set slightly different dates, so always verify yours. The current, official calendar always lives at HealthCare.gov's dates and deadlines page.

Special Enrollment Periods (SEPs)

Outside Open Enrollment, you generally can't just sign up. But a qualifying life event opens a Special Enrollment Period — usually 60 days — to enroll or switch. Common triggers include:

• Losing other coverage (for example, leaving a job or aging off a spouse's plan)
• Getting married or divorced
• Having a baby or adopting a child
• Moving to a new area with different plan options
• Certain changes in income or household size

If you're an early retiree who just left employer coverage, that loss of coverage typically opens an SEP — a key window for bridging to a Marketplace plan until Medicare. See our related guide, Medicare 2026: What's Changing, for how the two systems connect.

Who the Marketplace is for vs. Medicare

People mix these up constantly, so let's be clear. The ACA Marketplace is private health insurance, sold through HealthCare.gov or a state exchange, primarily for people under 65 who don't have affordable coverage through an employer or a public program. Medicare is the federal health program most Americans qualify for at age 65 (or earlier with certain disabilities).

For our TSM audience, three groups lean on the Marketplace most:

• Early retirees (roughly 55–64): people who left work before 65 and no longer have employer coverage but aren't yet Medicare-eligible.
• The self-employed and small-business owners: folks without a group plan, who buy their own coverage and often feel subsidy changes acutely.
• Pre-Medicare families (50–64): households bridging a few years until the primary earner turns 65.

Here's the coordination that trips people up: when you turn 65 and enroll in Medicare, you typically end your Marketplace plan, and any premium tax credit ends too. Timing that handoff correctly — so you don't double-pay or leave a gap — is one of the most valuable things a licensed advisor does. If you're approaching 65, start with our Medicare coverage overview and our comparison, Medicare Advantage vs. Original Medicare in 2026.

What to do if your premium spiked

If your 2026 premium jumped — or you're bracing for the next Open Enrollment — resist the urge to simply drop coverage. Going uninsured trades a known cost for an unlimited one. Instead, work through these steps:

1. Recheck your income estimate. Premium tax credits are based on your projected annual income. An outdated or inaccurate estimate can cost you subsidy dollars — or create a surprise at tax time.
2. Compare every metal tier. Bronze, silver, and gold plans trade premium against deductible differently. The "silver" benchmark drives your subsidy, but another tier may lower your total cost. If you qualify for cost-sharing reductions, silver is often especially valuable.
3. Look at the whole cost. Weigh premium, deductible, out-of-pocket maximum, drug coverage, and whether your doctors are in network.
4. Check the cliff. If you're near 400% of FPL, see whether legitimate adjustments to taxable income change your eligibility. This is where coordination with tax planning pays off.
5. Confirm the current law. Because Congress may still act on the enhanced credits, verify the latest status before you finalize anything.
6. Get a second set of eyes. A licensed independent advisor can model your specific numbers at no cost to you and flag options you might miss.

At TSM Life & Health, our philosophy is simple: educate first, plan second. We're an independent Connecticut advisory, which means we're not tied to a single carrier — our job is to help you understand the tradeoffs and choose what genuinely fits. You can read more about how we work on our process page, or browse common questions on our FAQ.

The goal isn't to chase the lowest premium in a vacuum — it's to find the coverage that protects your household at a total cost you can live with, and to time your move to Medicare cleanly.

Frequently asked questions

Written by

Keith McLiverty

Keith is the founder and COO of TSM Life & Health, with 30+ years in finance, taxes, medical insurance, and retirement planning. He believes in educating first and planning second, helping Connecticut families and pre-Medicare adults make confident, unbiased coverage decisions. This article is general education, not individualized advice.

Related reading