The transition from stable health coverage to financial uncertainty is no longer a theoretical debate for policy analysts. It is a daily reality for millions of Americans living in households where the math of survival is being recalculated.
As the enhanced subsidies that buoyed the Affordable Care Act (ACA) marketplace for several years expire, the human toll is becoming visible in real time.
For many, the cost of entry to the medical system has doubled overnight.
According to a report in MarketWatch, Kate Bivona and her husband are self-employed Arizonans who have used the ACA marketplace for the last 10 years to buy health insurance. They paid $118 a month for their premium with a $1,500 deductible. Then ACA subsidies, called enhanced premium tax credits, were allowed to lapse at the end of last year by the Republican-controlled House of Representatives.
After seeing how much their premiums would increase without the subsidies, they downgraded to a bronze plan that costs roughly $157 per month — but with a $18,000 deductible and an out-of-pocket maximum of $20,000.
Their situation is a microcosm of a national trend where the fear of high monthly premiums is driving people toward plans that offer protection in name only (1).
First introduced in 2021 and extended through 2025, enhanced premium tax credits significantly lowered the share of income that households on ACA plans were required to contribute toward their health insurance by extending premium subsidies to people making more than 400% of the poverty line if their monthly payments for a standard silver plan, capping those premiums at 8.5% of household income (2).
Now that the math has flipped, many families are finding that they either receive far less assistance or have lost eligibility for credits entirely.
The sticker shock can be severe. Data from the Kaiser Family Foundation indicates that average annual premium payments for subsidized enrollees may rise from $888 in 2025 to $1,904 in 2026 — a 114% increase year-over-year (3). And this is happening as families’ budgets are already under stress from unrelentingly expensive groceries and utilities.
The spike, which began after subsidies expired on Jan. 1, 2026, is already showing up in enrollment trends, with early indicators suggesting a decline in signups compared to previous years (4).
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Faced with these rising costs, many consumers are turning to underinsurance — purchasing less insurance than is appropriate for their needs — as a primary coping mechanism.
Families like the Bivonas may choose to move down to bronze or high-deductible plans to keep their monthly premiums lower. The risk with going this route is the high out-of-pocket costs, which could necessitate taking out medical debt if a crisis hits. On top of that, many families will be thinking twice before seeking out necessary medical care for fear of the costs, leading to an overall less healthy population, and health conditions that are allowed to get severe before they are addressed.
This pattern of choosing lower premiums at the expense of real protection is appearing across various states and income levels, creating a nationwide patchwork of financial vulnerability.
In response, some blue states are attempting to cushion the blow by introducing state funded subsidies.
In Connecticut, for instance, the Governor Ned Lamont announced $115 million for that state’s health insurance exchange to provide assistance to certain residents in the face of vanishing federal subsidies (5), and California, Colorado, Maryland, Massachusetts and New Mexico have also announced state-backed efforts to backstop disappearing federal subsidies (6).
Though these programs provide a vital lifeline for the residents of their states, they are not guaranteed to be permanent, and won’t help residents of states like Florida and Texas, which have the greatest numbers of subsidy recipients.
For those Americans, the search for affordability may lead them to private plans that offer inadequate or short-term coverage. These often come with significant coverage gaps, exclusions for preexisting conditions, and the potential for surprise bills.
While the low premiums are appealing, they often mask a level of financial exposure that can lead to bankruptcy if the policyholder actually needs care.
To navigate this difficult landscape, the most effective strategy may be to focus on lowering total financial risk rather than just your monthly premium.
Because subsidy amounts hinge on household income, small changes in what you report can have a significant impact on the help you receive. One of the first steps consumers should take is to ensure their income projections are updated and accurate, especially if you are near a key eligibility threshold.
It is also essential to compare all the parts of a plan: the premiums, the deductibles, and the out-of-pocket maximums. Compare how you would fare under each plan if you experienced a catastrophic medical event. Sometimes a plan with a slightly higher premium provides much better protection.
For those under age 30, or those who qualify for a hardship exemption because of low income, catastrophic plans may be a viable last resort. These plans, which are part of the ACA, offer lower premiums and cover essential benefits after a high deductible is met, acting as a safety net against absolute worst-case scenarios (7).
Regardless of the plan chosen, consumers should verify that their providers remain in-network and their necessary medications are still covered to avoid additional out-of-pocket hits.
A sensible approach is to look for the highest level of protection possible that still fits within a sustainable monthly budget, ensuring that a medical event does not become a permanent financial disaster.
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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
MarketWatch (1); Center on Budget and Policy Priorities (2); Kaiser Family Foundation (3, 4); Norwich Bulletin (5); CBS News (6); The Washington Post (7)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
