After eight senate Democrats broke ranks and joined Republicans in voting to end the longest government shutdown in U.S. history, the fate of the Affordable Care Act (ACA) enhanced premium tax credits, which hang in the balance ahead of the December 31 extension deadline, is squarely in the spotlight.
The tax credits were the main sticking point in the government shutdown, with Democrats demanding Republicans guarantee an extension in return for their vote to re-open the government. The Republicans refused, saying that they wanted to reopen the government first and then discuss the ACA tax credits.
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In joining the GOP in voting to end the government shutdown, the eight Democrats only secured a promised Senate vote on the ACA tax credits (1) — a far cry from ensuring their actual extension. Healthcare marketplace open enrollment began on November 1.
“At a time when prices are already too high, Americans are shopping for health insurance and experiencing such sticker shock that they are being forced to sign up for a crappy, overpriced plan or not signing up for insurance at all,” Arizona Democratic Sen. Ruben Gallego, who voted against the GOP motion to end the shutdown, declared (2).
And his frustration isn’t unfounded. A letter (3) from the Congressional Budget Office (CBO) back in May outlined the effects of not renewing the tax credits — which were introduced in 2021 and are largely used by lower- and middle-income Americans who earn approximately $15,000 to $60,000 annually, or between 100% and 400% of the federal poverty level (FPL).
The CBO letter explained that “the expiration of the expanded premium tax credits will increase the number of people without health insurance by 4.2 million in 2034.” And earlier this year it was reported that ACA enrollment hit an all-time high of 24 million Americans (4) — most of whom would see their health care premiums skyrocket if the enhanced credits end.
The cost of ending ACA tax credits
The Kaiser Family Foundation (KFF) reported that insurers raised the average cost of overall health coverage in 2025 by 26% (5). However, if the ACA tax credits aren’t extended, the KFF estimates a 114% rise in the cost of health care premiums, or an added $1,016 annually (6). Worse, people whose incomes fall between 150% and 200% of the FPL could face up to a 400% increase, going from paying an average of $180 to $905 annually (7).
One Utah-based photographer told ABC News that the monthly premium for her and her husband would jump from $495.32 to $2,168.68 (8) — an increase that she said “will devastate us if we tried to pay it.” And a woman in Texas explained to CNBC that monthly premiums for her family of four would go from $1,200 to more than $3,500 (9) — leading her and her husband to consider dropping their own health insurance and just paying for coverage for their two kids.
Meanwhile, older Americans and those who live in rural areas could be hit especially hard by a loss of the ACA tax credits.
The Center for American Progress found that those over age 55 could see premium increases as much as $16,700 annually (10), while The Century Foundation think tank reported that rural county Americans would face a premium increase of 107% compared to urban county residents, who’d pay 89% more (11). And that, they added, is on top of an overall national median 18% increase in premium costs as of August 2025.
When it comes to the promised Senate vote on the ACA tax credits, two hurdles remain. First, even if a vote to extend the tax credits passed the Senate, it would have to go to the Republican-controlled House for approval. And the GOP has offered no indication that that approval would happen.
Second, President Trump and other Republicans recently floated an idea to replace the ACA by ceasing payments to insurance companies to fund it and, instead, passing the money directly to Americans to invest in an HSA (health spending account) (12). The issue, as Forbes notes, is that HSAs are “especially helpful for wealthier individuals in higher marginal tax brackets” while “provid(ing) little help for people with lower incomes … leaving them with nothing to spare for HSAs.” Forbes added that because those with lower incomes fall into a different tax bracket, “tax benefits are minimal.”
With that in mind, the KFF found that 78% of Americans want the tax credits extended, while 42% said that they’d likely go without health insurance altogether if the credits do expire (13).
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3 things to do before ACA tax credits expire
Health policy analyst Louise Norris spoke with CBS News about the possible expiration of ACA enhanced premium tax credits (14), offering simple advice for those who rely on them: don’t panic, but prepare.
“Being proactive will help minimize financial surprises,” she said.
Here are three ways you can be proactive about your health coverage today.
1. Start looking for alternative coverage
From employer plans (if your workplace offers one) to Medicaid coverage (if you qualify), shop around for ACA alternatives. HealthCare.gov is a good place to start, with resources to help you compare plans that suit your needs and health insurance navigators who can answer your questions.
2. Start, or ramp up, saving
If you haven’t already started putting money away for health care needs, now would be a good time to begin. Having any sort of emergency savings will help soften the blow if the ACA tax credits end and you find yourself in a lower-tier plan or, worse, without a plan altogether. If you do have some extra cash to bank, and you have reason to believe you’ll stay relatively healthy, pairing a health savings account with a high deductible plan is a solid strategy. Premiums are lower and you can bank and grow savings to be used if a health care emergency arises.
3. Use those benefits while you have them
Get caught up on physical checkups, immunizations, prescriptions, specialist visits, counseling or anything else that your plan currently covers — and stay up to date through to the end of the year — while you still have your existing plan. If the tax credits do expire and you’re forced to find alternative health insurance, it’ll be one less thing to worry about knowing that you’ve addressed your health care needs as much as possible in the interim.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CNN (1, 2); Congressional Budget Office (3, 7); The Associated Press (4); The Kaiser Family Foundation (5, 13); Politico (6); ABC News (8); CNBC (9); Center for American Progress (10); The Century Foundation (11); Forbes (12); CBS News (14)
This article originally appeared on Moneywise.com under the title: Government shutdown nears end, but health insurance costs could spike for 20M+ Americans — 3 things to do now
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