Nearly half of adults insured through the Affordable Care Act (ACA) Marketplaces are employed by small businesses or are self-employed, according to a new analysis from KFF, previously known as the Kaiser Family Foundation. These individuals may soon see higher out-of-pocket premiums due to upcoming changes in ACA policy.
KFF reports that the expiration of enhanced premium tax credits at the end of this year will have a significant impact on health insurance costs for small business owners and some workers. The analysis indicates that if these credits expire, most individuals and families purchasing coverage through the ACA Marketplace would face an average increase of over 75% in their out-of-pocket premiums. Additionally, middle-income households—those earning more than 400% of the federal poverty line—would lose eligibility for any premium tax credits and would be responsible for paying full premiums.
For 2025, the federal poverty level is set at $15,650 for a single-person household and $32,150 for a family of four. This means that households earning up to $62,600 (single) or $128,600 (family of four) currently qualify for enhanced premium tax credits, which are scheduled to expire at year’s end.
The enhanced premium tax credits were introduced under the American Rescue Plan Act (ARPA) and later extended by the Inflation Reduction Act (IRA). These measures have helped lower premiums for millions and contributed to Marketplace enrollment more than doubling to 24.3 million people in 2025. Currently, 92% of enrollees receive some form of premium tax credit.
Insurers across the country are proposing an average increase in gross premiums—before any credits are applied—of 18%. This is partly attributed to expectations about how ending enhanced premium tax credits will affect who remains insured. Insurers anticipate that healthier individuals may drop coverage when subsidies end, potentially leaving a risk pool with more people likely to file medical claims. Other factors cited by insurers include rising drug prices, increased labor costs, and inflation.
“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.”
“Enhanced premium tax credits…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…”
“Insurers cite increasing costs and 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 [in]…the expiration of enhanced premium tax credits into their 2026 rates…”
