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You probably didn’t notice when it happened. December 31st came and went, and somewhere between the champagne and the bowl games, one of the largest health insurance subsidies in American history quietly expired.

If you buy health insurance through the marketplace — or know someone who does — this matters. A lot.

Let me back up.

A Quick History

In 2021, the federal government created enhanced premium tax credits through the American Rescue Plan Act. These subsidies made marketplace health insurance significantly more affordable for millions of people. They increased the amount of help for those already receiving assistance, and for the first time, extended subsidies to higher earners who’d previously been shut out.

The Inflation Reduction Act extended those enhancements through 2025. Twenty-two million out of 24 million marketplace enrollees were receiving them.

Then, on December 31, 2025, they expired.

Congress tried. The House passed a three-year extension in early January. The Senate couldn’t agree on a path forward. As of today, no fix has been signed into law. Bipartisan talks continue, but nothing is imminent.

What Changed on January 1st

The numbers are stark. On average, subsidized enrollees saw a 114% premium increase — from roughly $888 a year to about $1,904. That’s not a rounding error. That’s real money out of real paychecks.

For older Americans, the math gets brutal. The ACA allows insurers to charge people in their fifties and sixties three times what they charge younger enrollees. A 60-year-old couple earning $85,000 a year could now face $22,600 in annual premiums. That’s 26% of their gross income. For health insurance alone.

There’s also what’s called the “subsidy cliff.” Before the enhancements, anyone earning above 400% of the federal poverty level — about $62,000 for a single person, $128,000 for a family of four — received zero help. That cliff is back. Earn a dollar above the line and every penny of subsidy disappears. Not gradually. All at once.

The Repayment Problem Most People Don’t Know About

This is the part that keeps me up at night.

When someone enrolls in a marketplace plan, they estimate their annual income. The tax credit is based on that estimate. If they earn more than expected — a strong quarter, overtime, a side project — they owe the difference back at tax time.

Before 2026, there were caps on how much you’d have to repay. Those caps are gone. Someone who estimated conservatively and had a better year than expected could owe back the entire credit. Thousands of dollars, showing up as a surprise tax bill.

For anyone with variable or seasonal income, this is a genuine financial hazard. And most people don’t know about it yet.

Now, I’m not an accountant and would never presume to advise people on their own tax situation. My only advice would be to talk to an expert come tax time.

The Broader Impact

The Congressional Budget Office projects 2.2 million people will lose health insurance in 2026, rising to 3.7 million by 2027. The Urban Institute puts the 2026 figure at 4.8 million. Economists estimate $40.7 billion in lost economic output and roughly 340,000 jobs lost from the ripple effects.

Certain industries feel this more than others. Construction, for example, has an uninsured rate of 27.8% — thirteen points above the national workforce average. Among specific trades, the numbers are staggering, half of all roofers and nearly half of drywall installers carry no health insurance at all. Only 26% of construction workers in firms with fewer than ten employees have employer-based coverage.

But this isn’t just a construction problem. It’s a small business problem. Nearly half of all marketplace enrollees under 65 are self-employed, own small businesses, or work for firms with fewer than 25 employees. These are the people who relied most heavily on the subsidies that just disappeared.

Looking Ahead

I’m not going to sugarcoat it — there’s no quick fix on the horizon. But I will say this: the old model, where small employers either shoulder expensive group coverage or leave workers to navigate the marketplace alone, isn’t the only path anymore.

There are organizations building alternatives. Pooled-risk arrangements where smaller businesses come together through their trade associations for the kind of purchasing power that used to belong only to large employers. These models aren’t dependent on which way the political winds blow next session.

Chris Cordon is a Benefits Consultant specializing in pooled-risk health plans for trade associations.