As discussed in prior Health Capital Topics articles, the enhanced Affordable Care Act (ACA) premium tax credits expired on December 31, 2025, after Congress failed to pass extension legislation before the year-end deadline.¹ The expiration affects approximately 22 million marketplace enrollees who now face premium increases averaging 114%.² In the weeks since expiration, the U.S. House of Representatives passed a three-year extension bill, President Trump unveiled a competing healthcare framework dubbed “The Great Healthcare Plan,” and congressional leaders announced a bipartisan funding deal that notably excludes ACA subsidy provisions. This Health Capital Topics article provides an update on the current status of legislative efforts, the Trump Administration’s proposed plan, enrollment impacts, and implications for healthcare providers.

Background

The enhanced premium tax credits were enacted in 2021 as part of the American Rescue Plan Act (ARPA) and extended through 2025 via the Inflation Reduction Act of 2022. The enhanced subsidies expanded eligibility to households earning over 400% of the federal poverty level (FPL) and capped out-of-pocket premium payments at 8.5% of household income.³ Over 93% of Marketplace enrollees (21.8 million individuals) received the advance premium tax credit (APTC), and 53.5% of enrollees (12.5 million individuals) received cost-sharing reductions, as of February 2025.⁴

Trump Administration’s Healthcare Framework

On January 15, 2026—the final day of ACA open enrollment in most states—President Trump unveiled “The Great Healthcare Plan,” a healthcare policy framework calling on Congress to enact legislation addressing drug prices, insurance premiums, price transparency, and the structure of federal healthcare subsidies.⁵ The plan reflects the administration’s stated preference for directing federal healthcare funds to consumers rather than to insurance companies.

The framework includes several key provisions. The plan calls for codifying the administration’s Most-Favored-Nation prescription drug pricing agreements, which aim to align U.S. drug prices with those paid by other developed nations. The plan also proposes making more pharmaceutical drugs available for over-the-counter purchase.⁶ On insurance premiums, the framework proposes “stop[ping] sending big insurance companies billions in extra taxpayer-funded subsidy payments and instead send[ing] that money directly to eligible Americans to allow them to buy the health insurance of their choice.”⁷ The plan also proposes funding cost-sharing reductions (CSRs) for ACA plans, which the White House claims would save taxpayers at least $36 billion and reduce benchmark silver plan premiums by over 10%.⁸

Additional provisions address insurance company accountability and price transparency. The plan proposes a “Plain English” insurance standard requiring insurers to publish rate and coverage comparisons in accessible language, as well as requirements for insurers to disclose claim denial rates, average wait times for routine care, and the percentage of revenues paid to claims versus overhead and profits.⁹ On price transparency, the plan would require healthcare providers and insurers accepting Medicare or Medicaid to prominently post their prices.¹⁰

Market analysts and health policy experts have raised questions about the framework’s implementation details. The proposal does not specify the direct payment amount consumers would receive, eligibility criteria, or how such payments would interact with existing ACA structures.¹¹ Some analysts have expressed concern that shifting from premium subsidies to direct payments could destabilize the ACA marketplace. Cynthia Cox, KFF Vice President, stated that the proposal “has the potential to severely impact the stability of the ACA marketplaces” and could leave “people with pre-existing conditions without an option for comprehensive coverage.”¹² Administration officials have indicated the plan does not “close the door” on ongoing congressional negotiations to extend enhanced subsidies.¹³

The nonpartisan Committee for a Responsible Federal Budget noted that the fiscal impact of the proposal depends heavily on interpretation. If the direct payment provision refers to redirecting existing ACA subsidies, the provision could modestly reduce costs.¹⁴ However, if the proposal involves creating new funding streams comparable to the enhanced subsidies, doing so could cost the federal government up to $350 billion over ten years.¹⁵

January 2026 Legislative Update

On December 17, 2025, four Republican representatives signed House Minority Leader Hakeem Jeffries’ discharge petition, bringing it to the 218 signatures required to force a floor vote on a three-year subsidy extension.¹⁶ When the House reconvened, the January 7, 2026 procedural vote passed 221-205, with nine Republicans voting to advance the bill.¹⁷ One day later, 17 Republicans joined all Democrats to pass the three-year extension by a vote of 230-196.¹⁸

The House-passed bill faces significant obstacles in the Senate, which voted down a similar bill last month.¹⁹ A bipartisan working group of senators has been negotiating a compromise framework that would include a two-year extension (rather than three years), an income eligibility cap at 700% of FPL, a minimum monthly premium requirement (eliminating zero-premium plans), and expanded health savings account (HSA) options.²⁰

On January 22, 2026, the House passed a bipartisan appropriations package funding several federal agencies, including the Department of Health & Human Services (HHS) through fiscal year 2026.²¹ Notably, the deal does not include an extension of the enhanced ACA premium tax credits. The package represents a revival of healthcare provisions from a December 2024 agreement that collapsed after criticism from then-President-elect Trump and Elon Musk.²² The “sweeping” healthcare deal includes several healthcare provisions, including:

• A two-year extension of Medicare telehealth flexibilities (through 2027);
• A five-year extension of the Acute Hospital Care at Home waiver program (through fiscal year 2030);
• Increased funding for the National Institutes of Health ($48.7 billion);
• Pharmacy benefit manager (PBM) reform measures, including a ban on tying PBM compensation to drug list prices; and
• A requirement that hospital’s off-campus outpatient departments bill under distinct National Provider Identifiers (NPIs), setting the scene for the enaction of site-neutral payment polices.²³

The Senate is set to consider the bill on Friday, January 30, 2026, after Senate Democrats and President Donald Trump negotiated a deal to avoid a shutdown.²⁴ Nevertheless, the federal government will briefly shut down, as any Senate changes to the bill would need to be subsequently approved by the House, which is not in session again until February 2^nd.²⁵

Enrollment and Consumer Impacts

Centers for Medicare & Medicaid Services (CMS) data shows 22.8 million consumers signed up for 2026 marketplace coverage,²⁶ down from 24.1 million for 2025,²⁷ a decline of approximately 1.4 million enrollees.²⁸ New customer enrollment fell to 2.8 million (down from 3.9 million), while returning customers declined to 19.9 million (from 20.2 million).²⁹

State-level data reveals the consumer response to premium increases, with decreases in new enrollments, increases in terminations, and a trend of enrollees choosing less expensive plans.³⁰ A KFF survey of 1,350 marketplace enrollees conducted in November 2025 found that 25% would be “very likely” to go without insurance if their premiums doubled, while only 10% indicated they would stay with their current plan.³¹ With the enhanced credits now expired, over 22 million subsidized enrollees are seeing their annual premium payments more than double, from $888 in 2025 to $1,904 in 2026 on average.³²

Five states have implemented their own subsidy programs to partially offset the federal expiration.³³ California, Colorado, Maryland, New Mexico, and Washington have established programs offering varying levels of assistance to marketplace enrollees, with New Mexico providing the most comprehensive coverage by fully replacing lost federal credits for enrollees up to 400% of FPL.³⁴

Outlook

The January 30^th government funding deadline provides a potential vehicle for ACA subsidy provisions, but the bipartisan funding deal announced on January 20^th did not include such measures (nor did it include any of the Trump plan provisions).³⁵ Any congressional action to restore enhanced subsidies would now be retroactive, creating administrative complexity for insurers, providers, and consumers. The Congressional Budget Office (CBO) projects 2.2 million Americans will lose coverage in 2026, rising to 3.8 million in subsequent years if subsidies are not restored.³⁶

The competing visions represented by the House-passed three-year extension and the Trump administration’s “Great Healthcare Plan” framework reflect fundamental disagreements over how federal healthcare assistance should be structured and delivered. Whether Congress will ultimately restore the enhanced premium tax credits – and under what terms – remains to be seen. Health Capital Topics will continue to monitor these legislative developments and provide updates as events unfold.