Arizona’s Questions, Answered: The Expiration of Affordable Care Act Premium Tax Credits

Chances are, you or someone you know buys their health insurance through the Affordable Care Act (ACA) Marketplace. Since it was opened in 2013, the ACA Marketplace has offered an organized way for individuals and families to buy their own health insurance – particularly for people who cannot get insurance through work or public programs. Last year, 24.3 million people enrolled in Marketplace coverage, including people who are self-employed, shift workers, or gig workers who rely on the Marketplace for necessary health coverage.

If you’re not an enrollee yourself, you might not know that in the last few weeks, Americans have begun to feel the effects of the expiration of enhanced premium tax credits at the end of 2025. Here’s what that means for Arizonans.

What Are Premium Tax Credits, And Why Are They Expiring? 

If you get health coverage through the ACA Marketplace, you most likely receive a tax credit applied to your premium (the amount you pay each month for your plan). That’s not new – since 2014, the cost of premiums for ACA plans has been determined by a sliding scale based on the income of the enrollee. Those premium tax credits were enhanced in 2021, lowering rates even more in response to the COVID-19 pandemic and rising costs. Last year in Arizona, 379,185 people received these critical tax credits.

But Congressional Republicans allowed those enhanced credits to expire at the end of 2025 – just in time for open enrollment.

What Does The Expiration Of Premium Tax Credits Mean For Marketplace Enrollees?

For people enrolled in Marketplace plans, the expiration of premium tax credits brings with it a major rise in annual health care costs and difficult decisions about whether to stay insured at all. On average, out-of-pocket premiums for Marketplace plans were projected to rise 114% with the expiration of enhanced tax credits, but each individual case looks different. For example, a 60-year-old couple in Arizona with an income of $85,600 would see their premium rise by $20,177 – a 306% increase, equivalent to several months of rent. A family of four earning $66,000 would have an increase of $3,025, or 325%.

For many individuals and families, those increased costs are the deciding factor on whether or not to maintain coverage. For nearly 60% of Marketplace enrollees, an annual increase of even $300 in health care expenses would mean severely disrupting household finances. 

To make matters more complicated, ACA Marketplace insurers are reacting to the expiration of the tax credits by increasing costs even more. As some healthier enrollees decide to save money by forgoing coverage entirely, insurers are left anticipating an insured population that is sicker overall, affecting their bottom line. For that reason, insurers are raising their premiums this year by an average of 18% – adding insult to injury for potential enrollees already watching their rates double.

And for self-employed, shift, and gig workers, as well as small business owners, annual budgets are difficult to predict at the best of times. Because these individuals tend to have high income volatility, they may become subject to significant repayments at tax time. In other words, they may start the year eligible for a premium tax credit but end the year ineligible because of a change in income – meaning they would have to repay the entire credit. Rather than in past years, when there was a repayment cap based on household income, premium tax credit recipients are now required to repay the entire credit regardless of household income, due to a new provision in the Republican Tax Law.

Other groups affected by the expiration of premium tax credits include military veterans and ranchers. Nonelderly veterans, who don’t receive health insurance through the Department of Veterans Affairs (VA), depend upon premium tax credits to be able to afford coverage. Rolling back the enhanced premium tax credit prevents 267,000 of currently eligible veterans from receiving a credit. Meanwhile, nearly a third of farmers, ranchers, and other agricultural workers rely on individual market coverage for their health insurance – and if they get this coverage through the Marketplace, which most of them do, odds are that they received a tax credit in past years to lower their monthly premium cost. 

Between the expiration of premium tax credits, insurers setting higher premium rates, and already volatile incomes for people who need the Marketplace most, potential enrollees are facing tough decisions from all directions. 

What Does This Mean For Open Enrollment? 

In Arizona, the Marketplace Open Enrollment Season started at the top of November 2025 and ended January 15. Numbers indicate that enrollment in Marketplace plans has plummeted – 70,000 fewer Arizonans signed up for Marketplace insurance this time around, a near 20% drop from 2025. That’s not surprising considering premium costs have jumped nearly 30% on average.

In addition to financial strain, experts have pointed to logistical barriers that may have had impacts on open enrollment. Unlike in previous years, enrollees with lower incomes (less than or equal to 150% of the federal poverty level) are not eligible for year-round enrollment – meaning open enrollment is their one shot at getting a Marketplace plan this year, tax credits or no. Additionally, a reduction in funding for federal Navigators may have made it harder for some enrollees to find the help they need during open enrollment. Some enrollees likely switched from plans with better coverage to catastrophic plans to keep lower premium payments, but in exchange for a much higher deductible. And others have likely foregone coverage entirely.

What’s Next? 
Congress could extend the credits at any time but for Marketplace enrollees, higher premiums mean delayed care, skipped prescriptions, and families rolling the dice on their health in hopes of saving money. Until premium tax credits are restored, many Arizonans will be forced to make a terrible choice between financial stability and health coverage.