Your Health Insurance Could Skyrocket in 2026!
Starting in 2026, millions of Americans could see their ACA Marketplace premiums shoot up like a firework on New Year’s Eve. And not the fun kind. We’re talking hundreds of dollars more per month unless Congress decides to extend a benefit that’s been saving people serious money since the pandemic.
Spoiler: they probably won’t.
If you’re a solopreneur, contractor, student, early retiree, or anyone who buys their own health insurance, this directly affects you. If you’ve been getting premium tax credits to keep your monthly payments somewhat manageable, it’s time to pay attention.
Let’s break this down.
What is the Subsidy Cliff?
Back in 2021, the American Rescue Plan expanded ACA subsidies so that even folks earning more than 400 percent of the federal poverty level could qualify. That cutoff was around $103,000 for a family of three in 2025.
The result? Big savings. According to the Center on Budget and Policy Priorities, ACA enrollees saved an average of $700 a year, and many saved much more.
But those expanded credits are set to expire on December 31, 2025.
If that happens, we go back to the old system where earning just one dollar over the income limit disqualifies you from any subsidy. Not less help. No help.
So instead of your premiums gradually increasing as your income rises, you drop straight off a financial cliff. And there’s no safety net waiting at the bottom.
A Real-World Example
Let’s say the Johnsons are a family of four making $104,000 in 2025. Thanks to the current rules, they qualify for an ACA subsidy that cuts $800 per month off their premium. That’s $9,600 per year in savings.
Then in 2026, one of them gets a small raise. Their new income is $105,000. Just a thousand dollars more.
Under the old rules, that one-thousand-dollar bump disqualifies them from the subsidy entirely. So now they’re responsible for the full $800 per month they were previously getting help with.
That’s a $9,600 loss in exchange for a $1,000 raise. And the kicker? They might not even know they lost it until the IRS tells them in the spring of 2027!
And That’s Not the Only Number Going Up
If anyone in the Johnson family ends up needing care in 2026, they’re in for more bad news.
The maximum out-of-pocket cost for an individual is rising from $9,200 in 2025 to $10,600 in 2026. For a family plan, that number doubles. You could end up spending $21,200 out of pocket, on top of full-price premiums, if something serious happens. (Subject to change before Open Enrollment starts.)
That’s not insurance. That’s financial whiplash.
So, What Is Congress Doing?
As of now, nothing.
President Trump’s latest tax bill, lovingly referred to as the “big beautiful bill,” made the 2017 tax cuts permanent. But it did not even glance in the direction of ACA subsidies.
Some lawmakers have mentioned making the subsidy improvements permanent. But “mentioning” something in Washington usually means “we’ll forget about it by next week.”
And with a GOP-controlled Congress, ACA improvements are not exactly trending.
So yes, it's on you to prepare.
How to Avoid Getting Clobbered in 2026
If your income is anywhere near the 400 percent threshold, now is the time to make a plan.
Here’s what you can do:
1. Run the numbers.
If your income might increase in 2026, you need to know how close you are to the cliff. Your eligibility for subsidies will depend on the financial decisions you make this year.
2. Consider income smoothing.
Talk to your tax advisor or someone like me who actually understands how health insurance and taxes interact. You might want to:
Shift income from 2026 into 2025
Max out your Health Savings Account contributions
Use tax-loss harvesting
Delay retirement account withdrawals
Look for 2026 coverage options that are not income-based
3. Track income monthly, not annually.
In a world without expanded subsidies, one-time bonuses or unplanned side income can destroy your eligibility. Experts are recommending people track income monthly, especially in 2025, to avoid a costly surprise.
What This Means for You
If you’ve been enjoying affordable premiums because of the expanded ACA tax credit, that may be ending soon. For some, it means adjusting your budget. For others, it means switching plans or making decisions that reduce your taxable income.
And if you have no idea where you stand or whether this applies to you, don’t feel bad. Most people don’t realize anything is wrong until they get hit with a tax bill (too late to do anything about) that feels like a punishment for working too hard.
TL;DR - Expect to Pay More
Unless Congress extends the enhanced subsidy before the end of 2025, a lot of middle-income households will face major increases in their health insurance costs starting in 2026.
Your action plan:
Review your 2025 and 2026 income projections
Check your eligibility for subsidies under both the current and old rules
Plan ahead before open enrollment hits in November
Remember: the maximum out-of-pocket for 2026 will be $10,600 per person and $21,200 per family
Need help?
This is what I do. I help individuals, families, and small business owners navigate coverage options, tax credits, and real-life costs. No fluff. No pressure. Just the truth and a plan.
Book a free strategy call here:
https://calendly.com/mcgarrity/apt
Or shoot me an email: McGarrityLLC@Yahoo.com
Let’s get ahead of this before it gets ahead of you.