Navigating Premium Increases after Enhanced Tax Credits End: Families' Three Options

The federal enhanced premium sharing tax credit (PTC) has helped many families afford health insurance by lowering monthly premiums. This support ends after 2025, creating a sharp increase in costs for families earning around 400% of the federal poverty level—about $130,000 for a family of four. Without the enhanced PTC, families face a tough choice: pay higher premiums, find alternative coverage, or go without insurance. Understanding these options can help families prepare for the changes ahead.

Family reviewing health insurance options at home

Paying Increased Premiums Without the Tax Credit

For many families, the simplest option is to continue buying health insurance through the marketplace but pay the full premium without the enhanced PTC. This means monthly costs could rise significantly in 2026.

• What to expect: Premiums could jump by hundreds of dollars each month, depending on the plan, your demographics, and location.

• Why some families choose this: Maintaining coverage ensures access to doctors, hospitals, and prescription drugs without gaps.

• Considerations: Families should review their budgets carefully and shop around during open enrollment to find the best plan for their needs. Some may qualify for other assistance programs or lower-cost plans.

  
  

For example, a family currently paying $300 per month with the enhanced PTC might see that premium rise to $800 or more without the credit. While costly, this option avoids the risks of being uninsured and may provide better budgetability.

Buying Off-Exchange Coverage

Another option is to buy health insurance outside the marketplace, known as off-exchange coverage. These plans do not qualify for any premium credits, but they may offer different pricing or benefits.

• How it works: Families purchase plans directly from insurance companies or brokers. Self employed individuals may also be able to purchase self funded options.

• Potential benefits: Some off-exchange plans might have lower premiums or different networks that better suit a family’s needs. Self-funded options may provide lower cost up front options due to taking out the middleman.

• Drawbacks: Without the PTC, premiums remain high, families lose the protections and consumer safeguards that marketplace plans provide. Off-exchange plans may also have different rules about coverage and claims.

  
  

Families considering this route should compare plan details carefully. For instance, an off-exchange plan might have a lower premium but higher deductibles or limited coverage for certain services. Carefully review the coverage, as you could easily be faced with balanced billing issues or out-of-network issues. Ask yourself, is the increased risk worth the savings you may be getting?

Going Without Insurance

Some families may feel forced to drop health insurance altogether due to rising costs. This choice carries significant risks.

• Financial risks: Without insurance, families pay full price for medical care, which can be very expensive in emergencies or for chronic conditions.

• Health risks: Lack of coverage may delay care or prevent access to preventive services.

• Legal considerations: While the federal individual mandate penalty ended in 2019, some states still require coverage or impose penalties.

  
  

Choosing to go uninsured should be a last resort. Families should explore all other options, including Medicaid or state programs, before making this decision. At a minimum, families should consider whether CHIP is an option for their children.

I have heard that people are srtongly considering this option. If you are, please take a look at your health situation, prior claims experience that may be available online, and willingness to negotiate pricing for care. Many providers negotiate fixed rate pricing for those that self pay. Further, there are a growing number of provider networks focsed on self pay arrangements. A search on line can identify some of those options. On average, over 30% of claims are over $25,000 a year.

Finally, understand that health insurance is expensive and rates are based on what the average person is likely to experience in care and costs, so is it likely that your costs will be below average? Everyone thinks they will, but can't be the case.

Preparing for the Change

Families facing the end of enhanced premium credits can take steps now to prepare:

• Review current health insurance costs and coverage.

• Estimate new premiums without the PTC using online calculators or broker assistance.

• Explore alternative coverage options, including off-exchange plans and Medicaid.

• Plan budgets to accommodate potential premium increases, including considering a lower paying job that provides health insurance.

• Stay informed about state-specific rules and programs.

  
  

Health insurance is a critical safety net. Understanding the impact of losing the enhanced premium credit and knowing the available choices can help families avoid surprises and protect their health and finances.