Healthcare Policy Volatility: How Political Uncertainty Raises Insurance Costs
Congress expanded the Affordable Care Act (ACA)'s enhanced subsidies with the American Rescue Plan Act of 2021, lowering health insurance premiums and increased eligibility for millions of Americans. On Dec. 31, 2025, these subsidies expired as Congress failed to extend these credits. Now we have data on the results.
According to the Kaiser Family Foundation (KFF), the result was immediate and intense volatility, with sharp cost increases coinciding with equally striking drops in participation. Premiums rose by an average of 58%, enrollment plummeted from 22.3 million people in 2025 to 17.5 million or lower in 2026 and deductibles soared by 37% to a record high of $3,786.
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If your health insurance premiums rose in 2026 or you went uncovered because you couldn’t afford a policy, political and governmental uncertainty, inconsistency and inaction are likely to blame. While the legislation colloquially known as Obamacare has been disputed since its inception, lawmakers have failed to implement a satisfactory alternative while leaving the ACA in a state of limbo that has made access to healthcare unaffordable for a dangerously high portion of the population.
8 Decades of Work Gatekeeping Medical Coverage
According to the Johns Hopkins Bloomberg School of Public Health, America’s unequal, unaffordable and, for many, inaccessible health care system traces its roots to a 1943 IRS decision to give tax subsidies to employer-sponsored insurance plans, most of which are issued by large, self-insured corporations.
The move shackled huge swaths of the U.S. workforce to their jobs via health insurance they couldn’t otherwise afford. The unemployed and those in jobs that didn’t provide health benefits were left in the wilderness. The ACA was an attempt to remedy that with publicly funded subsidies for Marketplace-based policies not tied to an employer.
Per NPR, Obamacare’s political opponents sought to dismantle the ACA from the outset. While those efforts failed, they watered it down enough that what remains in 2026 doesn't adequately address the primary goal of making health insurance affordable.
Average Earners Have Been Hit the Hardest
The wealthy can afford private health insurance, and Medicaid covers the lowest-income households. However, the expiration of enhanced ACA credits leaves millions of low- and middle-income earners choosing between spending more than they can afford on healthcare or going uncovered.
The Hopkins study found that households earning up to $100,000 must now spend more than a third of their take-home income after taxes on the typical marketplace plan if they don’t qualify for credits. Harvard’s T.H. Chan School of Public Health found that the most dramatic increases hit those with incomes just above 400% of the federal poverty level — about $60,000 per year — who lost all subsidies in 2026 when the enhanced credits expired.
In Terms of Government Action, Something Is Definitely Better Than Nothing
The political uncertainty and inaction that created the current cost increases make it harder for both insurers and individuals to plan and budget.
The Harvard study found that healthy individuals are most likely to forgo coverage as premiums rise, which creates a cycle of ever-increasing cost pressure. As younger and healthier individuals drop out, insurers are left covering a growing number of older, sicker policyholders who spend more on healthcare, forcing carriers to raise premiums even further.
The Harvard analysis concluded that no single solution exists and that some combination of vouchers, temporarily reinstated subsidies and provider incentives could at least provide a band-aid. However, it ultimately determined what millions of Americans already know — that government inaction and political uncertainty are making an already bad problem worse.
Editor’s note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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