As the United States heads into the 2026 health insurance open enrollment season, millions of Americans are bracing for what could be the steepest surge in premiums and out-of-pocket costs in years. The convergence of expiring federal subsidies, escalating healthcare costs, and recent legislative changes is creating a perfect storm for consumers, state governments, and insurers alike.
In Virginia, the stakes are particularly high. According to data provided to Cardinal News by Sen. Scott Surovell, D-Fairfax County, the state will need to come up with nearly a quarter of a billion dollars annually—$234,650,902.10, to be exact—to maintain enhanced health insurance premium tax credits for the 203,057 Virginians who currently benefit from them. If Congress does not act by the end of 2025 to extend these credits, the burden could fall squarely on the state’s shoulders—or, more likely, on the wallets of individual Virginians.
“These health insurance policies are not nearly as affordable for working Virginia families without the benefit of these tax credits,” Surovell wrote in a text message to Cardinal News. He warned that losing these credits would reverse the gains made since Medicaid expansion and the launch of the Virginia Healthcare Exchange, pushing more people into the ranks of the uninsured and ultimately raising costs for everyone. “The cost of uninsured care will get pushed on to business, people will be less healthy because they can’t get medical care and we will all pay more.”
The enhanced premium tax credits, first created under the Affordable Care Act (ACA) and expanded by the American Rescue Plan Act in 2021, have played a crucial role in keeping coverage affordable. For Virginians earning between 100% and 200% of the federal poverty level—roughly $15,650 to $31,300 a year for a single person—monthly premiums have been as low as $27 to $59. Without the enhanced credits, that figure could skyrocket to $792 per month in 2026, according to the Virginia State Corporation Commission’s Bureau of Insurance.
The Inflation Reduction Act extended these subsidies through the end of 2025, but absent further Congressional action, the clock is ticking. If the enhanced credits lapse, those earning above 400% of the federal poverty level (about $62,600 for an individual) will no longer be eligible for any subsidy in 2026. Worse still, anyone whose income unexpectedly crosses that threshold during the year could be forced to repay thousands of dollars in subsidies at tax time—a scenario that Deepak Madala, director of Enroll Virginia, described as all too common. “A very common thing, we see this all the time, is that they lose their job or they have a purchase of some type, like they had damage to their house or flooding or something like that, and so they take a distribution on their retirement. All of a sudden they jump way over 400%,” Madala told Cardinal News.
The potential fallout extends beyond individual families. Julian Walker, spokesperson for the Virginia Hospital and Healthcare Association, explained, “When more people are uninsured, it leads to more uncompensated health care into the system—under federal law, hospitals are required to provide care to people who present at the emergency room regardless of insurance status or ability to pay. That can lead to less optimal health outcomes for patients as well as increasing health costs for businesses, families, and governments.”
State lawmakers are scrambling for solutions, but options are limited. Sen. Creigh Deeds, D-Charlottesville, acknowledged, “The reality is that the state does not have the resources to match federal cuts in spending dollar for dollar, but we are resolved to address this as best we can. We have worked too hard to reduce the number of uninsured Virginians, and we are exploring all avenues to ensure people continue to have access to care.” Del. Ellen Campbell, R-Waynesboro, emphasized the importance of working with federal representatives, while Del. Sam Rasoul, D-Roanoke, was blunt: “We would just not be able to clean up from the devastation that’s coming from the [Trump] administration.”
The sense of urgency is echoed at the federal level. U.S. Sen. Tim Kaine, D-Va., stated, “The Republicans chose to extend tax breaks for the rich while phasing out enhanced health insurance premium subsidies for everyday people. We fought to maintain those subsidies but Republicans refused to do so and now millions may lose their health insurance. We’ll keep fighting to restore them.” Sen. Mark Warner, D-Va., added, “For many families, Affordable Care Act tax credits make all the difference between having access to health care, or going uninsured. Especially now, as insurance companies and states work to finalize the cost of their premiums for next year, Congress must act.”
Meanwhile, Rep. Morgan Griffith, R-Salem, called for a broader reevaluation: “I think Congress needs to take up issues related to enhanced tax credits and financial supplements for various levels of the Obamacare exchanges. We must reevaluate policies while examining tax credits and/or financial supplements before the end of the year.”
The challenges aren’t confined to Virginia. In New York, the Department of Financial Services announced on September 2, 2025, that roughly 240,000 individuals with marketplace insurance will see their premiums rise by an average of 7% in 2026—less than the 12% jump in 2025, but still a notable increase. Small group plans, covering 685,000 people, are set to increase by 13%.
Nationally, the picture is even more daunting. According to recently released data from KFF, ACA insurers are seeking a median 18% premium hike for 2026—the largest since 2018 and well above last year’s 7% figure. Some states are reporting even steeper proposed increases. Rising medical costs, more expensive technologies, and increased utilization are all fueling the surge, with healthcare costs projected to rise by 8% in 2026, outpacing general inflation.
Further complicating matters, President Trump’s “Big Beautiful Bill,” signed into law in July 2025, is expected to cause nearly 12 million Americans to lose their health insurance by 2034, mostly due to Medicaid disenrollment, according to the Congressional Budget Office. Other projections, which factor in the expiration of ACA subsidies, estimate the total loss could exceed 17 million, including at least 5 million ACA enrollees losing coverage once subsidies expire at the end of this year. The law also brings new verification requirements, automatic monthly charges for those who qualify for $0 premiums, a shortened open enrollment period, and higher state costs for Medicaid and uncompensated care.
Even before these changes, affordability was already a concern. Family health insurance premiums have surged 297% since 2000, and deductibles for employer-based plans have risen nearly 50% since 2015. The average deductible for a standard ACA silver plan in 2025 is nearly $5,000—double what it was a decade ago—and is expected to rise further in 2026. Subsidized ACA enrollees have been shielded from much of the premium growth, but with the expiration of enhanced credits, that protection could vanish overnight. The CBO expects costs to rise by 75% for most people and 90% for those in rural areas if the subsidies lapse.
Insurers warn that without subsidies, healthier enrollees are likely to drop coverage, leaving a risk pool dominated by those with greater health needs—and thus even higher premiums for those who remain. As open enrollment notices go out in the coming weeks, millions of Americans will face difficult choices, with the affordability and accessibility of health care hanging in the balance.
With time running out, the decisions made in Congress and state legislatures in the coming months will have lasting consequences for the nation’s health care landscape, determining whether coverage remains within reach for millions—or slips further away.
