Newsletter

AN OVERVIEW OF WHERE ACA SUBSIDIES STAND NOW

The debate over Affordable Care Act (ACA) premium subsidies has entered a new and complicated phase. With the enhanced subsidies having expired at the end of 2025, millions of Americans are now facing higher premiums while Congress wrestles over what—if anything—will replace them.

What The House Has Done

The U.S. House of Representatives passed a three‑year extension of the enhanced ACA subsidies on January 8, 2026, with 230–196 bipartisan support, including 17 Republicans crossing the aisle.

These enhanced subsidies—originally expanded under the American Rescue Plan and later extended through 2025 by the Inflation Reduction Act—removed the income cap and lowered the percentage of income households had to pay toward premiums.

The House bill would revive those enhanced subsidies through 2028. Supporters argue this is essential to prevent steep premium spikes for the roughly 22 million marketplace enrollees who rely on these credits. Opponents cite concerns about fraud and program design.

What’s Happening In The Senate

The Senate is the real bottleneck.

Republican leadership opposes the House bill outright, and the chamber previously rejected a similar three‑year extension in December. However, a bipartisan working group is negotiating a narrower compromise—likely a two‑year extension with added guardrails such as:

• Income caps
• Minimum premium contributions
• Program‑integrity measures
• Potential changes tied to the Hyde Amendment, which restricts federal funding for most abortions

Hyde has become a sticking point, with some Republicans pushing for stronger language and others signaling openness to leaving current policy unchanged.

President Trump has indicated he may veto the House bill if it reaches his desk unchanged, adding another layer of uncertainty.

What This Means For Consumers Right Now

Because the enhanced subsidies expired on December 31, 2025, the marketplace has reverted to the original ACA subsidy structure:

• The income cap (400% of the federal poverty level) is back
• Households must contribute a higher share of income toward premiums
• Premiums have risen sharply for many enrollees

Analyses suggest premiums could more than double for some households without the enhanced credits. Enrollment in ACA plans dipped from 24.3 million for 2055 plans to 23 million for 2026 coverage. However, enrollment in alternative non-ACA plans for 2026 increased from 2025, but figures for these types of plans are not available; increased enrollment is due to the availability of longer-term short term medical plans as well as increased choices of non-ACA plans.

Affordability concerns are growing. See the last article in this newsletter.

What’s Likely To Happen Next

A final resolution is unlikely before February. The House bill is expected to stall in the Senate, but it may serve as a vehicle for a negotiated compromise. One possible outcome is:

• A shorter extension (likely two years)
• Some form of program tightening
• A deal that avoids reopening the Hyde Amendment fight

But nothing is guaranteed. The politics are volatile, and both chambers are under pressure from constituents facing higher premiums.

DIRECT PRIMARY CARE IN 2026: GROWING FAST AND BOOSTED BY THE BIG BEAUTIFUL BILL ACT

Direct Primary Care (DPC) continues to grow as more people look for affordable, predictable healthcare without the hassles of traditional insurance. In a DPC model, patients pay their doctor directly—usually a flat monthly fee—for primary care services. No insurance billing. No surprise charges. No rushed appointments.

How DPC Is Changing

DPC practices are expanding in several helpful ways:

• More employers are offering DPC memberships because it lowers overall healthcare costs.
• Same‑day visits and longer appointments are becoming standard.
• Many practices now include telemedicine, urgent care visits, and basic labs in the monthly fee.
• Doctors are using DPC to reduce burnout and spend more time with each patient.

DPC is especially popular with people who have high‑deductible ACA plans, medical cost‑sharing memberships, or no insurance at all.

How The Big Beautiful Bill Act Is Helping DPC Grow

The Big Beautiful Bill Act made several changes that directly support DPC and make it easier for families and employers to use.

1. HSA, FSA, and HRA Funds Can Be Used for DPC — Even Without A Monthly Fee

This is one of the biggest changes.

Under the Act, DPC payments are now treated as qualified medical expenses, which means:

• If a DPC provider charges a monthly or annual membership fee:

HSA, FSA, and HRA funds can be used to pay it.

• If a DPC provider does NOT charge a membership fee and bills per visit or per service:

HSA funds can still be used because these payments count as regular medical

expenses.

This removes a major barrier and makes DPC far more accessible.

2. Employers Have More Flexibility

The Act allows employers to:

• Pair DPC with high‑deductible health plans
• Offer DPC as a stand‑alone benefit
• Reimburse employees for DPC memberships

This has led to a surge in small businesses adopting DPC.

3. Stronger Transparency Rules

The Act pushes for clearer pricing across healthcare.

DPC already leads the way in transparency, so these rules make it look even more attractive compared to traditional insurance‑based clinics.

4. Support For Non‑Insurance Healthcare Models

The Act includes language that encourages:

• Direct Primary Care
• Medical cost‑sharing communities
• Cash‑pay specialty networks

This helps legitimize DPC as a mainstream option.

Why This Matters

For many families, DPC offers:

• Predictable monthly costs
• No surprise bills
• Better access to their doctor
• Lower overall healthcare spending

And with the Big Beautiful Bill Act removing financial and regulatory barriers, DPC is becoming easier to use, easier to afford, and easier for employers to offer.

NEW FAQS AVAILABLE: REPAYING EXCESS ADVANCE PREMIUM TAX CREDITS FOR PLAN YEAR 2026 AND BEYOND

These two new Frequently Asked Questions (FAQs) issued by healthcare.gov on December 30 address commonly asked questions for APTC (advanced premium tax credit or tax subsidy) repayment starting in Plan Year 2026 (i.e. when consumers are filing their federal taxes in 2027) based on recent legislative changes:

Consumers are required to report changes that affect their eligibility for Marketplace coverage and financial assistance, including changes related to their household income, family size, and offers of other health coverage. Additionally, consumers may want to consider accepting less APTC during Plan Year 2026 (which means they would pay a higher monthly premium amount to the issuer) in order to reduce the risk of having a tax liability when they file their federal income taxes for Plan Year 2026 in 2027.

NEW FAQS AVAILABLE: REPAYING EXCESS ADVANCE PREMIUM TAX CREDITS FOR PLAN YEAR 2026 AND BEYOND

A January 21 article in the Palm Beach Post reports that Florida experienced one of the steepest drops in Affordable Care Act enrollment in the nation following the expiration of the enhanced federal subsidies at the end of 2025. According to early federal data, more than 260,000 Floridians who previously relied on marketplace coverage did not renew their plans for 2026. That single‑state decline accounts for nearly 20% of the 1.4 million people nationwide who left the ACA marketplace.

Florida has historically led the country in ACA enrollment, driven by gig workers, small‑business owners, and early retirees. But with the enhanced subsidies gone, premiums rose sharply—often doubling—leaving many consumers unable to afford coverage.

The article highlights the story of a Deerfield Beach resident whose premium jumped to $800 per month, forcing him to consider bankruptcy despite crediting the ACA with saving his life during multiple heart surgeries.

The piece notes that although January 15 was the final day to enroll, the numbers may fall further as people who were automatically renewed on healthcare.gov discover they cannot afford their new premiums and cancel in the coming weeks. Note:  we personally contacted all our clients and in almost every case our clients either actively renewed their Affordable Care Act coverage OR enrolled in Association plans (these are Association plans available year-round that provide individual coverage on a group chassis and are designed for healthy individual who can successfully answer health questions and who either have no or low tax subsidies.)

Overall, the article frames the enrollment plunge as a direct consequence of the subsidy expiration and a looming affordability crisis for many Floridians.

About Paul Cholak

Paul has over forty years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He understands the health and life insurance needs of individuals and families of all ages. He also has considerable experience in selling health and life insurance to employer groups.

He guides you through the steps of getting health and/or life insurance and is available to help you both BEFORE and AFTER you've made your purchase decision.