NEW YORK (AP) — Key tax credits aimed at making health insurance more affordable for most participants in the Affordable Care Act expired as the new year began, resulting in increased healthcare costs for millions across the country.

A 43-day government shutdown driven by Democrats highlighted the urgency of the issue. Meanwhile, some moderate Republicans pushed for a resolution with an eye on preserving support ahead of upcoming elections. Former President Donald Trump proposed a possible compromise but withdrew the suggestion following opposition from conservatives.

Despite various efforts, the subsidies lapsed as scheduled. Lawmakers are expected to bring the matter to a vote in the House in January, but whether a fix will succeed remains uncertain.

This policy shift directly impacts millions of Americans who are not covered through their jobs and do not qualify for Medicare or Medicaid. This includes independent workers, owners of small businesses, and those in agriculture.

The timing coincides with a pivotal midterm election cycle, as the rising costs of living—particularly healthcare—are front-and-center concerns for voters.

“It’s so frustrating that the middle class is moving from being squeezed to being completely choked financially, and nothing is being done about it,” said Katelin Provost, a 37-year-old single mother whose insurance costs will sharply rise. “It’s discouraging to see so little action.

Some households face soaring insurance bills

The subsidies were first introduced in 2021 as temporary support to help Americans during the COVID-19 pandemic. They were later extended by Democrats, set to end in early 2026.

These enhanced tax credits allowed many low-income individuals to pay no premiums and capped premium costs at 8.5% of income for higher earners, while also widening eligibility for the middle class.

Analysis by the nonprofit health research group KFF indicates that the average ACA participant receiving support will face a 114% increase in premiums starting in 2026.

This rise comes amid broader escalating healthcare expenses, further increasing the out-of-pocket burden in many insurance plans.

For some, like Stan Clawson—a 49-year-old filmmaker and part-time teacher in Salt Lake City living with paralysis—a higher premium is difficult but manageable. Clawson’s monthly premium will increase from under $350 to nearly $500. Despite the cost, health coverage is vital for him.

Others, like social worker Provost, are facing much steeper hikes. Her monthly healthcare premium will surge from $85 to nearly $750—a change she says she simply can’t absorb.

Enrollment impact uncertain

Experts warn that eliminating the subsidies may lead many of the 24 million people enrolled under the Affordable Care Act—particularly younger and healthier users—to drop their coverage entirely.

If healthier individuals exit the system, it could raise costs even more for those who remain, many of whom are older or chronically ill.

A joint study published last fall by the Urban Institute and the Commonwealth Fund estimates that approximately 4.8 million Americans may lose coverage in 2026 due to the higher prices.

However, since the enrollment period runs through January 15 for most states, the actual impact on sign-ups won’t be clear immediately.

Provost, hoping Congress finds a quick resolution, plans to drop herself from coverage if prices remain unchanged, choosing instead to keep insurance only for her four-year-old daughter.

Months of debate, no outcome yet

Over the past year, lawmakers debated how to address the issue after major cuts to federal health funding were included in a large tax and spending package backed by former President Trump.

Although Democratic leaders continued to advocate for an extension of the subsidies, many Republicans were hesitant to act until late in the year.

In December, the Senate struck down both a Democratic proposal to extend the tax credits for three more years and a Republican alternative that would have promoted health savings accounts instead.

In the House, a group of moderate Republicans crossed party lines to support a potential January vote on a three-year renewal of the credits. But with similar legislation already failing in the Senate, its chances of passage are unclear.

For Americans whose premiums have surged, the lack of action in Congress is difficult to accept. Many believe it’s time for broader reforms aimed at improving affordability for everyone.

“Both major political parties keep saying this needs to be fixed. So then fix it,” said Chad Bruns, a 58-year-old ACA participant from Wisconsin. “They always talk about the root of the problem but never actually solve it.”