The ongoing federal budget impasse has ramifications far beyond Washington politics. Among the most serious: the future of the ACA’s marketplace premium subsidies is uncertain—and that could mean sharply higher health-insurance costs for millions of Americans.
What’s at stake
Since 2021, enhanced premium tax credits under the ACA have lowered costs for individuals and families buying insurance on the marketplace. These subsidies helped many who don’t receive employer coverage, especially small-business owners, self-employed individuals, and moderate-income households.
With Congress at a stalemate over funding, those subsidies are now hanging in the balance. A failure to act would mean that many people who currently receive this assistance could suddenly face much higher premiums in 2026 and beyond.
How big the impact could be
- Analysts estimate that premiums for marketplace plans could increase by an average of over 100% for those affected if the enhanced credits expire.
- Some households who currently pay little to nothing in premiums could see themselves paying thousands of dollars more each year.
- Around 22 million Americans could lose access to the enhanced credits if no extension is passed before year end.
- State insurance officials are warning that the longer Congress waits, the harder it will be to adjust rates and implement changes smoothly—leading to major disruptions during open enrollment.
Why the shutdown is tied to this
The same funding legislation that would reopen the government is also expected to determine the future of the ACA subsidies. Some lawmakers insist that any temporary spending bill must address the premium-tax-credit issue. Because of the impasse, decision-making is delayed—and uncertainty grows for insurers and consumers alike.
What this means for small businesses and individuals
If you run a business with 2 to 10 employees (or are self-employed) and rely on marketplace coverage (or help your employees do so), here are key things to keep in mind:
- Prepare for possible premium increases: If subsidies lapse, expect significant hikes in costs for you or your employees.
- Monitor developments closely: Legislative decisions could come quickly and will shape plan options and cost-sharing.
- Evaluate alternatives: If marketplace coverage becomes unaffordable, you may need to explore small-group plans, defined-contribution models, or other structured options.
- Communicate with employees early: Make sure your team understands that subsidy levels are uncertain and that plan selection timing will matter.
- Act early during open enrollment: With volatility in the market, reviewing options sooner rather than later can help avoid surprises.
Final thought
What appears to be a Washington budget standoff is actually a defining moment for the affordability of health-insurance coverage. For millions of Americans—and for small businesses especially—the safest approach is to plan proactively. Even if Congress ultimately extends the subsidies, preparing now will help you stay ahead and protect your bottom line.