TL/DR –
The enhanced premium tax credits for health insurance purchased under the Affordable Care Act are set to expire this year, which would significantly increase premiums for insurance from Obamacare exchanges. Approximately 19 million Americans qualify for these credits, saving an average of $700 per year, and an estimated 3.8 million people would potentially drop their insurance entirely if they expire. There are calls for Republicans to collaborate with Democrats to extend the credits, with a GOP polling firm suggesting this move could mitigate House Republican losses in 2026 battleground districts.
Trump’s Big Beautiful Bill and its Impact on Obamacare
With President Trump’s One Big Beautiful Bill now law, the fallout of its healthcare cuts becomes a critical topic amidst the impending 2026 midterms. One such action under consideration is the potential extension of enhanced premium tax credits for health insurance, a mitigating measure for these cuts.
As KFF explains, these tax credits were established under the American Rescue Plan in 2021 and extended through 2025 by the Inflation Reduction Act. Their expiration this year could lead to increased premiums for insurance from the Obamacare exchanges.
The enhanced credits helped double the enrollment in these exchanges to about 24.3 million in 2025. Nearly 19 million Americans are eligible for these credits, saving an average of $700 annually per beneficiary. An estimate found that letting them expire would increase net premium payments by over 75% on average. The CBO estimates 3.8 million would lose their insurance entirely.
Interestingly, the enhanced credits have been crucial in expanding healthcare in Republican states like Florida and Texas, which did not accept the Obamacare Medicaid expansion. The looming expiration of these credits could come as a surprise to many Americans, including Trump supporters.
Republicans have been encouraged to work with Democrats to extend these credits as part of a regular tax bill, which could help minimize Republican losses in 2026 battleground districts. One circulating memo suggests that saving these credits would show compassion while ensuring the individual market remains a safety net for adults on Medicaid who lose coverage.
While Democrats are likely willing to cooperate on this issue, the process could be complex as the bill may require spending offsets and face potential changes through amendments. Ultimately, the fate of the bill lies in the support it receives from the Trump White House.
If the credits aren’t extended, the resulting spike in premiums will quickly become a point of contention. The Republicans, who invested heavily in extending tax cuts for the wealthy, will have no one to blame but themselves.
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