Fixing the ACA subsidy cliff costs less than ignoring it
Summary
Congress let enhanced ACA tax credits lapse at the end of 2025. Restoring them permanently would cost $350 billion over ten years, per the Congressional Budget Office. Not restoring them is already costing more: $40.7 billion in state GDP and 339,100 jobs in 2026 alone, while 2.9 million people dropped off marketplace coverage.
The bill either way
There were always two prices on the table: what it costs to keep the enhanced credits, and what it costs to let them go. The Congressional Budget Office put a number on the first in September 2025 — a permanent extension of the credit structure first enacted under the American Rescue Plan Act would add $350 billion to the deficit between FY2026 and FY2035, split between $296 billion in direct spending and $54 billion in foregone revenue. Averaged evenly across that decade, it comes to roughly $35 billion a year.
Congress chose not to spend that money. But the alternative has a price too, and it isn't zero. Researchers at George Washington University's Milken Institute School of Public Health, publishing through the Commonwealth Fund, ran the Urban Institute's coverage-loss estimates through the same industry-standard economic model insurers and state agencies use (IMPLAN) and found that leaving the credits expired shrinks state economies by $40.7 billion and state and local tax revenue by $2.5 billion — in 2026 alone. That single year already outweighs the annualized cost of the fix, and unlike the 's ten-year price tag, the hit recurs every year the credits stay lapsed.
View data as table
| Restoring the credits (annualized) | $35B/yr | CBO 10-year total ÷ 10 |
|---|---|---|
| Leaving them expired (2026) | $40.7B | state GDP loss, Commonwealth Fund/GWU |
The same choice, counted in people
Money aside, the credits' expiration shows up directly in who still has coverage. Federal data released by HHS in June 2026, as reported by KFF's analysis of the report, puts effectuated marketplace enrollment at 19.2 million in February 2026 — down from 22.1 million the year before. That's a drop of 2.9 million people, 13%, the largest single-year decline since the exchanges opened in 2014.
View data as table
| Feb 2025 | 22.1M | effectuated enrollment |
|---|---|---|
| Feb 2026 | 19.2M | effectuated enrollment, −2.9M / −13% |
The mechanism is straightforward. Per CMS's 2026 Open Enrollment Report, as analyzed by the Peterson-KFF Health System Tracker, the average enrollee's net monthly premium payment rose from $113 to $178 — a 58% jump — even after many people downgraded to skimpier plans to soften the blow. The average deductible climbed from $2,759 to $3,786, up 37% and the steepest one-year increase the marketplace has ever recorded. Enrollees who stayed in their exact same plan and did not downgrade saw an even sharper hit: their net premium payments roughly doubled. Faced with that, some people traded coverage for a cheaper, worse plan; others simply left the market. The 339,100 jobs at risk in the Commonwealth Fund/GWU estimate are largely the second-order effect of that exit — slightly less than half of them in health care itself, the rest in the businesses that depend on people having both coverage and money left over to spend.
The takeaway
- The lapse wasn't free. Doing nothing has a price too — $40.7 billion in state and 339,100 jobs at risk in 2026 alone, which already exceeds the annualized cost of the fix Congress declined to fund.
- The coverage loss is not a projection anymore. 2.9 million people came off marketplace rolls between February 2025 and February 2026 — the largest one-year drop since the exchanges opened in 2014 — and 's own June 2026 data confirms it happened.
- Higher payments, thinner plans. Average net premium payments rose 58% and deductibles rose 37% in a single year, pushing more enrollees into bronze-tier plans with less coverage even as they pay more to keep any plan at all.
Dollar figures mix a ten-year federal budget estimate (), a single-year state economic-impact estimate (Commonwealth Fund/GWU), and single-year premium/enrollment data (/) — each is labeled with its own time frame and should not be summed across sources.
Sources
- Congressional Budget Office — The Estimated Effects of Enacting Selected Health Coverage Policies on the Federal Budget and on the Number of People With Health Insurance (Sept. 2025, publication 61734): the $350 billion, ten-year deficit cost of permanently extending the enhanced premium tax credits. cbo.gov
- Leighton Ku et al., George Washington University Milken Institute School of Public Health / Commonwealth Fund — Expiring Premium Tax Credits Could Lead to Nearly 340,000 Jobs Lost Across the U.S. in 2026 (Oct. 16, 2025): the $40.7 billion state loss, $2.5 billion state/local tax revenue loss, and 339,100 jobs-at-risk estimate for 2026. commonwealthfund.org
- U.S. Department of Health and Human Services, ASPE — Exchange Enrollment 2026 (released June 26, 2026): the 19.2 million February 2026 effectuated enrollment figure. aspe.hhs.gov
- Quick Takes — Marketplace Enrollment Is Down By 3 Million After Big Jump in Premium Payments: reporting and analysis of the enrollment data, including the Feb. 2025 baseline of 22.1 million. kff.org
- Peterson- Health System Tracker — Higher Premium Payments or Higher Deductibles: The Tradeoffs Enrollees Face (May 19, 2026): average net premium payment ($113 to $178) and average deductible ($2,759 to $3,786) figures, sourced to 's Health Insurance Exchanges 2026 Open Enrollment Report. healthsystemtracker.org
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The enhanced premium tax credits that made marketplace coverage cheap expired on schedule at the end of 2025. Congress did not act to extend them, and 2026 is the first full year of finding out what that costs — not in theory, but in a federal enrollment count and a state-by-state jobs estimate that both landed this year. Neither number is a projection anymore.