What the End of Obamacare Subsidies Could Mean for Your Health Coverage

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Updated: Dec 11, 2025 7:39 PM CUT

Published: Nov 10, 2025 6:40 PM CUT

Senate Lawmakers Speak To Reporters Following Weekly Policy Luncheons

Senate Majority Leader John Thune (R-SD) talks to reporters following the weekly Senate Policy Luncheon at the U.S. Capitol in Washington, D.C., on December 9, 2025.

Senate Majority Leader John Thune (R-SD) talks to reporters following the weekly Senate Policy Luncheon at the U.S. Capitol in Washington, D.C., on December 9, 2025.Chip Somodevilla—Getty Images

Rebecca Schneid

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Updated: Dec 11, 2025 7:39 PM CUT

Published: Nov 10, 2025 6:40 PM CUT

The fast-approaching expiration of federal subsidies for people buying healthcare on the Affordable Care Act (ACA) marketplace appears all but guaranteed after Senate Republicans declined to include an extension of the tax credits in their health care proposal and then blocked a competing Democratic bill that would have extended them on Thursday.

The subsidies, which are set to expire at the end of the year, were at the center of the impasse that shut down the government for the longest period in U.S. history this fall. Democrats refused to pass President Donald Trump’s spending bill until they were extended, and Republicans dug in, spreading false claims about what Democrats were demanding, even as polls showed most people blamed Trump and his party for the shutdown. 

The government ultimately reopened after eight Democrats abandoned their party's demand and joined with Republicans in approving a temporary spending measure in exchange for a promise from Senate Majority Leader John Thune that a vote would be held in mid-December on an extension bill for ACA subsidies of Democrats’ choosing.

On Thursday, however, the Senate rejected a motion to advance Democratic legislation that would have extended the subsidies, which were added during the pandemic and previously extended by Congress through the Inflation Reduction Act (IRA) in 2022, for another three years.

A Republican bill that instead proposed replacing the tax credits with new health savings accounts also failed on Thursday, leaving Congress without a clear path to address the steep rise in health insurance costs expected to follow the subsidies' expiration.

Read More: Why Obamacare Prices Could Surge for Millions Next Year

"I say to my Republican colleagues, our bill is the last train to leave the station," Senate Minority Leader Chuck Schumer, a New York Democrat, said before the votes. "If Republicans don't climb aboard, there won't be another chance to act before premiums skyrocket next year."

Healthcare costs could triple for millions of people

The subsidies have been essential for people buying healthcare through Obamacare. In 2025, 24 million individuals obtained insurance through the ACA marketplace, and the Center on Budget and Policy reports that 93% of enrollees received tax credits that helped reduce their costs.

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If Obamacare subsidies do expire, though, marketplace estimates say that premiums could double—or even triple— for those 22 million Americans who receive enhanced subsidies that make health premiums cheaper. According to health policy research group KFF 57% of ACA marketplace enrollees live in Republican congressional districts.

Older adults and seniors are particularly at risk of losing access to their healthcare, since the subsidies spurred a 50% reduction in the uninsured rate among Americans 50 to 64. 

The Congressional Budget Office (CBO) also estimates that, with ACA expirations, about 4 million more people would become uninsured than would otherwise be the case.

Read more: Why It Could Take All Week to End the Government Shutdown

This increased uninsured rate could have various consequences, including higher Medicare costs and strains on hospitals nationwide.

Nonprofit Medicare Rights Center summarizes that with this increase in uninsured people, “the coverage losses would mean higher Medicare costs, because more people would enter the program in poorer health and needing more expensive interventions.”

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And as the risk pool worsens, hospitals and state and local governments could end up bearing the brunt of these ACA changes.

“There's a follow-on effect of loss of insurance that ends up affecting governments and health providers in the local community,” says associate professor at Harvard Kennedy School of Government Mark Shepard.

Insurers across the market—not just those relying on ACA subsidies—are bracing for the effects of the expiration, as volatility is expected. This could mean rising premiums for anyone on the ACA marketplace, regardless of reliance on subsidies, and for those on off-exchange plans, too, which tend to match their rates to ACA-compliant plans.

Furthermore, as some people relied more on employer-sponsored insurance due to rising premiums in the ACA marketplace, employers facing higher enrollment and costs may shift some of that burden to their workers.

A September report from Mercer found that total health benefit costs per employee is expected to rise 6.5% on average in 2026, the highest rate increase in over 15 years. Based on a survey of over 1,700 US employers, 59% of employers will make cost-cutting changes to their plans in 2026.