The American Rescue Plan Act (ARPA) increased Marketplace premium tax credits beginning in 2021, making health coverage more affordable for millions of consumers. The Inflation Reduction Act (IRA) later extended those enhanced savings through the end of 2025. For Plan Year 2026, these temporary savings will expire, and Marketplace premium tax credits will return to pre-ARPA levels.
What’s changing:
The income cap for subsidies (previously removed under ARPA) will return. Households earning over 400% of the federal poverty level (FPL) may no longer qualify for premium tax credits. For households still eligible, the percentage of income spent on premiums may increase, meaning higher out-of-pocket costs. Consumers will still be able to qualify for savings under regular ACA rules, but the enhanced reductions in premium costs from ARPA will no longer apply.
Example:
Under ARPA rules, a family earning 450% of the FPL could still qualify for a subsidy that capped their premium at about 8.5% of income. In 2026, that family may no longer qualify for any savings.
What stays the same:
Standard ACA premium tax credits and cost-sharing reductions remain available for eligible households. Medicaid and CHIP eligibility rules do not change. Marketplace open enrollment and renewal timelines remain the same.
Quick tip:
Consumers who currently receive ARPA-enhanced subsidies should expect higher 2026 premiums unless Congress passes new legislation to extend these savings. To prepare, update your application early during Open Enrollment 2026 and review your plan options carefully.