As 2025 came to a close, health care policy experts—and Americans who could not get insurance through an employer—focused on whether Congress would extend the enhanced Affordable Care Act (ACA) subsidies that made Marketplace coverage more affordable. Those enhanced subsidies kept enrollees from paying more than 8.5% of their income in premiums.

In the end, Congress did not extend the subsidies, and premiums were expected to double for people who had been receiving them. LDI Senior Fellow Betsy Salazar, fellow neonatologist Nicolas Novick, and their colleagues used national survey data to estimate the potential effect on family premiums across income levels.

The team found that middle-income families would be among the most affected. Their net premiums would rise to about 15% of total family income, a level the researchers view as unaffordable.

Now that the subsidies have expired and the latest data show that about 5 million people may drop coverage in 2026, Salazar and Novick discuss how the policy change could affect families with children.

What motivated you to examine the changes to the ACA Marketplace subsidies for families with children?

Salazar: Families with children occupy a unique position in the health insurance landscape. Children may qualify for Medicaid or the Children’s Health Insurance Program (CHIP) even when their parents do not, making premium calculations and coverage decisions more complex for families than for individuals. Although Medicaid and CHIP are the primary source of coverage for most children, Marketplace enrollment among children more than doubled between 2019 and 2025, increasing from 3% to 7% nationally. Even when children retain public coverage, a family’s decision to drop their Marketplace plan can affect the whole household’s financial stability and access to care, potentially harming children. Prior analyses did not fully capture this family-level dynamic.

As neonatologists, our team sees firsthand how financial stress affects families with seriously ill newborns. We also know that insurance coverage is foundational to accessing care. We wanted to understand what the effect, in real dollars, on families across the income spectrum.

You simulated the potential expiration of the enhanced ACA subsidies, and they have since expired. What was your most important finding, and how does it compare with the data so far?

Salazar: Our most striking finding was how differently the expiration affected families across income levels. For middle-income families earning above 400% of the federal poverty level (FPL)—people who often work full time for small employers that do not offer coverage—we estimated that net premiums would rise to about 15% of total family income after the enhanced premium tax credits (PTCs) expired. That would represent a dramatic jump from roughly 8% with the enhanced credits in place.

The early real-world data are sobering. Marketplace enrollment has already declined by about 1 million, and projections suggest that as many as 4.8 million people could ultimately lose coverage. This tracks with what our simulation predicted: when premiums rise sharply, families—especially working, middle-income families without a fallback option such as Medicaid—face a binary choice between paying an unaffordable premium or going uninsured.

How did you choose this study design to measure the effects of subsidies?

Salazar: We used the 2023 National Survey of Children’s Health (NSCH) because it is the best nationally representative dataset on families with children.It captures not only income but also family composition, child and parental health, and material hardship. Because actual 2026 premium payment data are not yet available, simulation was the most appropriate approach.

These are simulated estimates, not observed premium payments, so they should be interpreted as indicators of the likely burden rather than a precise accounting.

Most of our methodological choices likely led us to underestimate the burden. As a result, the actual premium burdens families face are probably at least as high as our estimates and could be higher.

You provide newborn intensive care. What are the implications of families losing ACA subsidies in your practice?

Salazar: This policy change is deeply concerning. Neonatal intensive care unit (NICU) hospitalizations are very expensive, and the financial burden extends well beyond discharge. Families face ongoing costs for specialist follow-up care, therapies, medications, and adaptive equipment. Our paper found that even before this policy change, families in income groups affected by PTC policies reported high rates of material hardship. Nearly half of parents in lower-income groups reported less than good physical or mental health, and one in four children in those families had two or more medical conditions. The premium increases we estimated would substantially compound that stress for families who rely on Marketplace insurance, adding a sharp increase in monthly premiums to the existing costs of caring for a medically complex infant. This increased financial stress leaves families with fewer resources to invest in their children’s health and well-being.

Do you have recommendations for future policy action based on your findings?

Salazar: Policymakers should eliminate the premium “cliff,” or the sharp increase in costs that families earning more than 400% of the FPL now face. The original ACA design left families above that income threshold responsible for the full cost of premiums, and our simulations show that families at that income level could face net premiums approaching 15% of their income under the current policy. That is simply not affordable, particularly for working families with limited or no alternative coverage options.

Fully restoring the enhanced PTCs is the most straightforward remedy and would provide the greatest benefit across income groups. Short of full restoration, policymakers could consider:

1. Permanently capping premium contributions based on income. The 8.5% cap was the right approach, but it just wasn’t made permanent;
2. Providing targeted relief for the 100–250% FPL group through cost-sharing reductions, since that group also faces high out-of-pocket costs even with premium subsidies; and
3. Ensuring that new plan designs intended to attract enrollees with lower premiums—such as high-deductible plans—do not weaken financial protections for families managing chronic illness or neonatal care.

Where are you going next with your research on ACA subsidies?

Salazar: We will replicate and extend this analysis using the Medical Expenditure Panel Survey (MEPS). This approach will allow us to move beyond simulation and measure the real impact on families who were enrolled in Marketplace plans—including who dropped coverage, whether they switched plans, and how income changes factored in.

We are also very interested in understanding how the picture changes as Medicaid work requirements and increased eligibility verification requirements under H.R. 1 are implemented. Our paper focused on the Marketplace premium burden, but for lower-income families, the more immediate threat may be losing Medicaid altogether. If children and parents are disenrolled from Medicaid due to work requirements or paperwork barriers, they are barred from enrolling in a Marketplace plan. We want to understand how families navigate that situation and the downstream effects on coverage continuity and access to care for children, particularly those with medical complexity.

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The study, “Estimating Costs to Families Facing Changes to ACA-Enhanced Premium Tax Credits” was published in Pediatrics on April 27, 2026. Authors include Nicolas P. Goldstein Novick, Brielle Formanowski, Scott A. Lorch, Timothy D. Nelin, Diana Montoya-Williams, Abigail B. Wilpers, and Elizabeth G. Salazar.

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