In the shutdown standoff over expiring Affordable Care Act tax credits, Democrats emphasize thousand-dollar premium increases for middle- or “working-class” Americans, while Republicans say people who are well-off unfairly benefit from the subsidies. Some higher-income earners could get subsidies, if they live in areas with costly insurance premiums, but about 95% of those getting subsidies in 2024 earned less than 400% of the poverty level.
And while there are cases where out-of-pocket costs are set to increase by $1,000 or $2,000 a month if the expanded tax credits are allowed to expire as scheduled, the average increase is $1,016 for the year, a 114% rise, according to estimates from the health policy research organization KFF.
(KFF’s estimate includes a median 18% increase in premiums by insurers, who have cited rising health care costs and government policies for the increase — including the expiration of the expanded subsidies, which is expected to cause some healthier enrollees to drop their coverage, according to the Peterson-KFF Health System Tracker. Having fewer healthier enrollees in a risk pool results in higher rates for the remaining policyholders.)
The impact of the expiration can vary greatly, depending on age, income, family size and location. Those earning above 400% of poverty (that’s above $84,600 for a couple, $128,600 for a family of four) would experience the high-dollar increases in out-of-pocket costs, because they wouldn’t get any tax credits if the expanded subsidies expire. And the increase would be particularly high for older enrollees, as their premiums can be three times higher than younger policyholders.
Very low-income enrollees could experience high percentage increases, or go from paying nothing for an insurance plan to paying about 2% to 4% of their income. For those earning under 400% of poverty, the amount they have to pay would still be capped at a percentage of their income — no more than 10% for 2026 — but they’d pay higher percentages than they are paying now.
As we’ve explained before, expanded ACA subsidies, first passed by Democrats in 2021 as part of pandemic relief legislation, are set to expire at the end of the year. Democrats want an extension of those more generous subsidies to be part of legislation to continue funding the federal government, while Republicans have said the issue should be discussed separately at a later time. The impasse has caused a government shutdown that began Oct. 1.
A permanent extension of the more generous subsidies would cost nearly $350 billion over 10 years, according to the Joint Committee on Taxation and Congressional Budget Office.
Under the ACA, subsidies are available for people buying their own insurance on the ACA marketplaces if they earn between 100% and 400% of the federal poverty level (the starting point is 138% in states that adopted the Medicaid expansion). But in 2021, the subsidies were expanded as part of the American Rescue Plan Act. The enhancement increased the financial help enrollees could get, and eliminated the 400% income cap. Those earning above that level could get subsidies, though they’d have to pay 8.5% of their income toward premiums, as KFF has explained.
The poverty level for this year is $15,650 for an individual or $32,150 for a family of four, with the threshold rising as family size increases.
The enhanced subsidies were originally set to last for two years but were extended through the end of 2025 by other legislation passed by Democrats.
Enrollment in ACA marketplace plans has more than doubled from 2020 to 2025, when enrollment hit 24.3 million, about 7% of the U.S. population. The vast majority of enrollees in 2025 — 92% — received subsidies, according to the Centers for Medicare & Medicaid Services. That means that more than 22 million people could see some increase in their out-of-pocket costs if the enhancement expires, with some dropping coverage as a result.
The CBO estimated that 4.2 million more people will lack health insurance in 2034 if the enhancement expires. The Urban Institute estimated that 4.8 million more would lack insurance next year.
Politicians on both sides have made some accurate, but cherry-picked, claims about who gets, or could potentially get, subsidies and how people could be affected by the pending expiration of the enhancement. We’ll provide context on these talking points and explain what’s known about the income levels of those benefiting from the subsidies.
Democrats’ Claims
In an Oct. 22 press conference, House Minority Leader Hakeem Jeffries said that “notices are going out to millions of people right now, as we speak, across the country, frightening them to death when they see that their premiums are about to increase, in some instances by more than $1,000 or $2,000 a month. And more than 90% of the people who receive Affordable Care Act tax credits make approximately $63,000 a year. Think about that. How can you possibly afford premium increases of more than $1,000 or $2,000 a month?”
According to 2024 data from the Centers for Medicare & Medicaid Services, about 95% of those getting the ACA subsidies earn up to 400% of the poverty level, which is $62,600 for an individual. The income cut-offs are higher for families, though. A family of five earning $150,600 is also at 400% of poverty.
There are some instances where out-of-pocket costs are expected to increase by $1,000 or $2,000 per month, or more. But those increases are expected to affect those earning above 400% of poverty, a group that would no longer get any financial help if the enhanced subsidies expire. The Urban Institute analysis found that on average, the net premium cost for those getting subsidies and earning above 400% of poverty would nearly double, increasing by $4,035 for the year.
But the increase would be particularly high for older enrollees, those in high-premium areas or those earning just over the 400% threshold.
“While virtually all subsidized enrollees will pay more next year to keep the same plan, older middle-income ACA enrollees will see the largest dollar increases in premium payments due to the return of the ‘subsidy cliff,'” KFF’s Shameek Rakshit, a research associate, wrote in an early October post, using a term for what happens to those no longer eligible for subsidies if the enhancement expires.
A graphic shows how an average 60-year-old earning a bit over 400% of poverty faces high out-of-pocket increases. For a 60-year-old making well over 400%, the percentage or dollar increase in out-of-pocket cost would be less, because the enrollee is still required to pay 8.5% of income under the enhanced subsidies. By the time this enrollee earns $180,000, no subsidies are offered, even under the enhancement.
“On average, a 60-year-old couple making $85,000 (or 402% FPL) would see yearly premium payments rise by over $22,600 in 2026, after accounting for an annual premium increase of 18%,” KFF’s late September report on the expiring subsidies said. “This would bring the cost of a benchmark plan to about a quarter of this couple’s annual income, up from 8.5%.”
For those earning under 400% of poverty, the impact also varies, but they’d still receive subsidies if the enhancement expires. The enhancement changed the percentage of income people have to pay before ACA subsidies kick in. These required contributions are on a sliding scale.
For example, those at 300% to 400% of poverty used to pay 9.5% of their income; the enhanced subsidies lowered that to 6% to 8.5%. (See Figure 4 in this report from the Bipartisan Policy Center. Note that Trump administration changes will increase the required contribution percentages in 2026.)
Many of those earning between 100% and 150% of the poverty level could get insurance for $0 out of pocket under the enhancement, but would pay up to about 4% of their income if the more generous subsidies expire. “For example, a family of four with a household income of $45,000 (140% of FPL) with a $0 premium in 2025 will see their premiums increase to $1,607 a year,” the Bipartisan Policy Center report says.
KFF provides other scenarios, and a calculator that can produce more. A young family of four in Alameda, California, earning $93,000 would pay 73% more (about $3,770 for the year) without the enhancement. A 28-year-old earning $35,000 in Leavenworth, Kansas, would pay $1,582 more for the year, a 153% increase, KFF said.
Democrats have highlighted the higher-dollar impact on those earning just over 400% of poverty.
In an Oct. 28 press conference, Senate Minority Leader Chuck Schumer said, “In New York, the average family with a plan costing $280 a month will pay $1,700 a month for the same plan next year.” His office had posted a document with several examples of the pending increase for “the average couple making $85,000” in various locations in the state. One, for Plattsburgh, New York, fits Schumer’s description and others show increases of nearly or over $1,000 per month.
Similarly, in the same press conference, Sen. Tammy Baldwin highlighted high increases for people earning a bit over 400% of poverty in her state of Wisconsin. “Yesterday in Wisconsin, my constituents got a sneak peek. For an average family of four, their premiums are skyrocketing by nearly $17,000. For an average 60-year-old couple, they will be paying more than $24,000 for health care next year,” she said.
Those examples come from Gov. Tony Evers and the Wisconsin Office of the Commissioner of Insurance. A family of four earning $130,000 a year (about 405% of poverty) would see annual premium increases of more than $12,000 to more than $24,000, depending on the county they live in. The 60-year-old couple earning $85,658 would see higher increases, up to $33,000 in one county.
A third example from the state shows an annual increase of up to $2,100 for a 26-year-old earning $48,000.
Jeffries has repeatedly framed this as an issue for “working-class” Americans. “The American people know that Democrats are fighting for them, for working-class America, for middle-class America, and for everyday Americans, and that Republicans continue to show up for the wealthy, the well-off, and the well-connected,” he said. Republicans have countered that the ACA subsidies go to the well-off.
Republicans’ Claims
On the Sunday political talk shows on Oct. 19, Republican Sen. Katie Britt said that “millionaires” were getting subsidies. “Do you understand Democrats are actually asking for us to continue premiums that are going to millionaires in some cases? We have got to be more — more responsible with taxpayer dollars,” she said on CBS’ “Face the Nation.” Britt made the same point on CNN’s “State of the Union” that day, saying that she is “willing to have a conversation” about “reforms to these credits” after Congress votes to open the government.
Britt wasn’t talking about people earning a million dollars a year. A spokesperson for the senator referred us to a 2016 CNBC article that said early retirees who had a net worth above $1 million had received subsidies because their annual incomes met the ACA parameters. The program, well before any expansion of subsidies, considers annual income, not net worth, to determine eligibility.
Other Republicans have highlighted the enhanced subsidies’ lack of an income cap. Sen. Lindsey Graham said on NBC’s “Meet the Press” on Oct. 12 that he wouldn’t vote to extend the enhancement. “If you make over $400,000 you get subsidies for your health care,” he said. Sen. Rand Paul said on “Fox News Sunday” on Oct. 26 that those earning $225,000 could get subsidies.
It’s possible for a family with those incomes to get subsidies, depending on their ages, family size and where they live, but it would likely be rare for a family at the $400,000 level to do so.
Insurance premiums vary by location because of competition, and differences in the risk pool and health care costs. For instance, a fictional family of five living in Manhattan and earning $400,000 likely wouldn’t qualify for subsidies, according to KFF’s subsidy calculator, but if the family lived in central Arizona, they could get nearly $1,200 per month in 2026 with the enhancement — while paying about $2,200 or $2,800 per month out of pocket for their insurance.
“There isn’t a single income that premiums tax credits are phased out at,” Justin Lo, a senior researcher for KFF’s Program on the ACA, told us in an email. “With enhanced premium tax credits, the maximum amount for the subsidized, out-of-pocket premium payment is capped at 8.5% of annual income. So, if a family’s unsubsidized premium is really high—such as for older adults, larger families, or those living in areas with overall high premiums—they are more likely to get a subsidy even with a high income. Additionally, poverty level scales with family size. A larger family with a six-figure income is at a lower level of poverty than a smaller family with the same income.”
While the vast majority of ACA enrollees getting subsidies earn 400% of the poverty level or less, as we said, an estimated 5% of those getting the financial help were above that threshold, according to 2024 open enrollment information from CMS.
Most enrollees — 66% — earned 200% of the poverty level or less.
Those above the 400% level got an average tax credit of $354 per month, solely due to those expanded subsidies.
If the enhanced subsidies were extended, the Joint Committee on Taxation estimated that 85% of federal spending for the subsidies next year would go to those earning $150,000 or less, categorized by tax returns. About $1.5 billion, or 5.5% of federal spending, would go to the $200,000 to $500,000 income group. JCT estimates that no money would go to income groups above $500,000.
About 1.6 million ACA marketplace enrollees in 2025 are above 400% of the poverty level (not all get subsidies), and nearly 1 million of those are above 500% (that’s $160,750 for a family of four), according to CMS data compiled by the Bipartisan Policy Center. About another 1 million enrollees haven’t provided income information, “but it is likely they have higher incomes and have not applied for tax credits,” KFF says.
The CMS data doesn’t provide more of a breakdown on income, so we don’t know if families earning upwards of $400,000 are getting subsidies. Jessica Banthin, a senior fellow in the Urban Institute’s health policy division, told us that it would be “extremely unlikely” and only possible with a large family, older parents and high-cost states.
For instance, Banthin was able to make the math work for a family of five with 64-year-old grandparents as the heads of household in the high-premium state of West Virginia. They’d get a tax credit of over $3,000 a month. But “I don’t think that family exists in reality,” Banthin said, “or that many people are getting subsidies at that level of income.”
A family earning that much would have other options, she said, such as employer-based insurance or the small-group market for small-business owners, where they would “probably get a better plan.”
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