Tax Credits

The Kaiser Family Foundation, an independent, non-profit organization that focuses on health policy research, polling and news has projected higher premiums, especially for older Americans, if the enhanced tax credits are not in place for next year.

The Commonwealth Fund has projected nearly 5 million people could lose health insurance coverage in 2026, as a result of eliminating the enhanced tax credits.

Center on Budget and Policy Priorities (CBPP.org), a non-profit, non-partisan research organization and policy institute has projected that almost 22 million people will see their health care costs rise significantly or will lose their health coverage completely if the enhanced tax credits are not renewed. The hardest hit will be enrollees between 50 and 64 who have incomes above the 400% of federal poverty level. These people would experience a tax credit "cliff" with no tax credits at all. The 2025 federal poverty level in the 48 contiguous states plus DC is $32,150 for a family of four. The tax credits would phase out at $128,600 for a family of four.

Planning for the 2026 calendar year is very challenging. The planning process typically takes into account the expected Adjusted Gross Income, information about health and expected surgeries, specialist visits and medications. This year, the tax credits have not been renewed by Congress for 2026, as of this writing. Premiums have been projected to increase exponentially. There are limited choices for low premium plans, since catastrophic plans are limited to enrollees under age 30. There are exceptions for those who are granted a hardship or affordability exemption. However, there are no tax credits available for catastrophic health plans. HSA compatible plans may offer some relief in lower premiums and the tax benefit of contributing to a Health Savings Account.

It's difficult to plan for something that has not been experienced before. The last week of October, Access Health will open up the "shopping window" which will give a sneak peak of the plans and prices for 2026 based on projected income.

If the tax credits are absent or are too low, what are the options? You might delay the enrollment/renewal process for a while. Keep in mind, you have to enroll by December 15 to have an effective date of January 1, 2026.

Will the tax credits be retroactively applied, if Congress approves extending tax credits through 2026? As of now, that is an unknown.

The open enrollment period goes beyond December 15. If you want to have a February 1, 2026 effective date, you can enroll by January 15, 2026.

Will open enrollment be delayed or extended beyond January 15? As of now, there has been nothing posted by Access Health on courses of action if the tax credits are not available for the 2026 enrollment season.