KFF, formerly known as the Kaiser Family Foundation, said Wednesday that 48% of U.S. adults now insured through the Affordable Care Act (ACA) Marketplaces work at small businesses or are self-employed – and will soon face higher out-of-pocket premiums.
Changes made to the ACA, including the scheduled expiration of the enhanced premium tax credits at the end of this year, will have significant implications for what small business owners and some workers spend on their health insurance, KFF said in its analysis.
If the ACA's enhanced premium tax credits expire, out-of-pocket premiums would rise over 75%, on average, for the vast majority of individuals and families buying coverage on the ACA Marketplace, KFF said. Middle-income individuals and families (with household incomes over 400% of the federal poverty line) would no longer be eligible for any premium tax credits, leaving them to pay the full premium amid rising healthcare costs.
For 2025, the federal poverty level (FPL) for a single-person household is $15,650, making 400% of the FPL $62,600. For a family of four, the 2025 FPL is $32,150, therefore, 400% of the FPL is $128,600. Workers and the self-employed at these income levels now qualify for the enhanced premium tax credits that are set to expire at the end of the year.
Enhanced premium tax credits, created under the American Rescue Plan Act (ARPA) and later extended through the Inflation Reduction Act (IRA), have reduced premiums for millions of Marketplace enrollees. They have also contributed substantially to Marketplace enrollment more than doubling to 24.3 million people in 2025.
Currently, over 9 in 10 enrollees (92%) receive some amount of premium tax credit.
Additionally, insurers are proposing an increase in gross premiums (before premium tax credits are applied) of 18% nationwide, partly due to the impact on the risk pool of the expiration of enhanced premium tax credits.
Insurers cite increasing costs and the utilization of high-priced drugs as well as general market factors, such as increasing labor costs and inflation, as contributing to premium increases. However, insurers are also factoring the expiration of the enhanced premium tax credits into their 2026 rates, believing that healthier people will drop their coverage and leave ACA insurers with a pool of sicker people more likely to have medical claims.
