Charlotte, December 19, 2025
As enhanced subsidies for Affordable Care Act plans are set to expire in North Carolina, nearly 900,000 residents face potential healthcare cost increases of over 114%. Without legislative action, the financial burden could leave millions uninsured, with projected monthly premiums soaring. The expiration raises urgent concerns about affordability and access for families nationwide, prompting discussions among lawmakers regarding future healthcare policies.
Charlotte, North Carolina – Millions of Americans, including nearly 900,000 North Carolinians, are bracing for a significant increase in healthcare costs as enhanced subsidies for Affordable Care Act (ACA) marketplace plans are set to expire on December 31, 2025. Without congressional intervention, enrollees nationwide could see their monthly premiums more than double, leading to concerns about affordability and a potential rise in the uninsured population.
Impending Financial Strain on Policyholders Nationwide
The expiration of these enhanced subsidies will mark a pivotal moment for healthcare affordability. The subsidies, initially introduced through the American Rescue Plan Act and subsequently extended by the Inflation Reduction Act, have played a crucial role in reducing premium costs for individuals and families purchasing health insurance through the ACA marketplace.
Nationwide, the average annual premium payment for Marketplace coverage is projected to increase substantially. Experts estimate an average premium increase of 114%, or approximately $1,016 per year, if the enhanced credits are not extended. This could mean the average annual premium jumping from under $900 in 2025 to $1,900 in 2026 for many households.
Beyond increased costs, there are serious concerns about coverage loss. Projections suggest that up to 4.8 million more adults could become uninsured in 2026 if the subsidies lapse. The Congressional Budget Office (CBO) estimates that extending the enhanced subsidies would increase net insurance coverage by about 3.5 million people per year.
A key feature of the enhanced subsidies is the cap on how much enrollees pay for a benchmark plan, limiting it to no more than 8.5% of their household income. The expiration of these provisions will remove this cap, particularly affecting middle-income families. Furthermore, the “subsidy cliff,” which previously limited eligibility for financial assistance to those earning up to 400% of the federal poverty level, is set to return. This means individuals and families with incomes above this threshold will lose all premium assistance, facing the full cost of their health plans.
North Carolina Residents Face Double Impact
The impact of these expiring subsidies will be keenly felt across North Carolina. In 2025, nearly 900,000 people in the state benefited from the enhanced premium tax credits. On average, North Carolinians received subsidies totaling $574 per month, reducing their average monthly premium to about $97. For those specifically eligible for subsidies, the average net premium was as low as $69 per month. A significant majority, 94% of North Carolina Marketplace enrollees, were eligible for these premium tax credits.
Adding to the burden of expiring subsidies, North Carolina’s individual ACA coverage plans are already facing substantial rate increases for 2026. The average rate for individual ACA policies in the state is approved to increase by nearly 28.6%, with specific increases ranging from 16.88% to 36.4%. The state’s Insurance Commissioner, Mike Causey, has attributed these rising premiums to both increased healthcare costs and the impending expiration of federal subsidies.
For example, one North Carolina family, consisting of a couple and three children, reported facing a potential premium increase from $800 to $1,600 per month if the subsidies expire.
The state utilizes the federally facilitated exchange, HealthCare.gov, for residents to purchase their ACA Marketplace plans.
Political Divide and Legislative Maneuvers
The looming deadline has intensified discussions in Washington. The enhanced subsidies, while temporary, have been a subject of ongoing debate between political parties regarding their extension. The Congressional Budget Office estimates that extending the subsidies for three years would cost approximately $64 billion.
Recently, a bipartisan effort emerged in the House of Representatives, with a group of moderate Republicans joining Democrats to force a vote on a three-year extension of the ACA subsidies. This initiative, driven by a discharge petition, garnered the necessary 218 signatures to compel a floor vote. However, a vote on this extension is not expected until January 2026 due to legislative procedural rules, pushing any potential resolution past the December 31, 2025, expiration date.
The Senate previously considered and rejected similar proposals for extending the subsidies. House Republicans recently passed a separate healthcare bill that does not include an extension of the expiring ACA tax credits, highlighting the ongoing partisan disagreement on the issue.
North Carolina’s Senator Ted Budd previously downplayed the impact of expiring ACA subsidies on North Carolinians. More recently, Senator Budd voted in favor of the “One Big Beautiful Bill Act,” legislation that included cuts to Medicaid and was described as promoting tax cuts and “responsible spending reforms.” In contrast, North Carolina’s Senator Thom Tillis has expressed concern regarding the impact on constituents, citing instances of families facing significant premium increases.
Additional Impacts and Calls for Action
Beyond the general population, specific groups are also facing unique challenges. Deferred Action for Childhood Arrivals (DACA) recipients are set to lose eligibility for ACA coverage and associated tax credits beginning in 2026.
The prospect of higher premiums and increased uninsured rates has led to calls from various stakeholders for congressional action. The outcome of the legislative efforts in early 2026 will determine the future of healthcare affordability for millions across the country, including hundreds of thousands of individuals and families in North Carolina, as they navigate the post-subsidy landscape.
Frequently Asked Questions (FAQ)
- What are the enhanced ACA subsidies?
- The enhanced ACA subsidies are financial assistance measures that help individuals and families afford health insurance purchased through the Affordable Care Act marketplace. They were introduced by the American Rescue Plan Act and extended by the Inflation Reduction Act.
- When are the enhanced ACA subsidies set to expire?
- The enhanced ACA subsidies are set to expire on December 31, 2025.
- How will the expiration of these subsidies impact healthcare costs nationwide?
- If the enhanced subsidies expire, millions of Americans face sharply higher premiums. The average annual premium payment for Marketplace coverage is estimated to increase by 114%, or approximately $1,016 per year.
- How many North Carolinians will be affected by the expiration of ACA subsidies?
- Nearly 900,000 North Carolinians received the enhanced premium tax credit in 2025 and will be affected by its expiration.
- What is the projected average rate increase for individual ACA coverage in North Carolina for 2026?
- For those in North Carolina that have individual ACA coverage, the average rate will increase by nearly 28.6% in 2026.
- What is the “subsidy cliff” and will it return?
- The “subsidy cliff” refers to the previous income limit of 400% of the federal poverty level for ACA subsidy eligibility. The enhanced subsidies temporarily eliminated this cliff, but it is set to return in 2026, meaning those with incomes above this threshold will lose all premium assistance.
- Are there ongoing efforts in Congress to extend the subsidies?
- Yes, a bipartisan effort in the House of Representatives has led to a discharge petition with enough signatures to force a vote on a three-year extension of the ACA subsidies. However, a vote is not expected until January 2026.
Key Features of Enhanced ACA Subsidies and Their Expiration
| Feature | Details with Enhanced Subsidies (through Dec 31, 2025) | Details After Expiration (from Jan 1, 2026) | Scope |
|---|---|---|---|
| Premium Cost Cap | Limited to 8.5% of household income for benchmark plan. | Reverts to original ACA sliding scale (e.g., 2% for 100% FPL, up to 9.96% for 300-400% FPL). | Nationwide |
| Income Eligibility for Subsidies | No upper income limit; eligibility based on premium cost relative to income. | “Subsidy cliff” returns; eligibility generally limited to those earning up to 400% of the federal poverty level. | Nationwide |
| Projected Average Premium Increase | (N/A – subsidies keep costs lower) | Estimated 114% increase, or $1,016 per year (average nationwide). | Nationwide |
| Projected Uninsured Population Change | (N/A – subsidies help maintain coverage) | Up to 4.8 million more adults could become uninsured. | Nationwide |
| North Carolina Average Monthly Subsidy (2025) | $574 per month. | (N/A – these specific enhanced subsidies expire) | State-level |
| North Carolina Average Net Monthly Premium (2025) | $97 per month (overall average); $69 per month (for subsidy-eligible). | Expected to rise significantly. | State-level |
| North Carolina Projected Average Rate Increase (2026) | (N/A – pre-expiration rates) | Nearly 28.6% increase for individual ACA coverage, in addition to subsidy loss. | State-level |
| DACA Recipient Eligibility for ACA Coverage/Tax Credits | Eligible. | Loss of eligibility starting in 2026. | Nationwide |
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