ACA Shake-Up: What the 'One Big Beautiful Bill' Means for Your Health Insurance Costs
Especially important for those who buy their own health insurance: the self-employed, early retirees, or those between jobs
We won’t know what is in the final bill until it is signed, possibly by July 4th, but there is enough intel out there to know that some changes will likely be made to the Affordable Care Act (ACA) subsidies. This is one of those details that can blindside people, so I thought it important to write about now.
Bottom line: If you buy your own health insurance—whether you're self-employed, an early retiree, or between jobs—a bill moving through Congress could dramatically increase your premiums starting in 2026. Here's what's at stake and what you need to know.
What's Happening Right Now
The "One Big Beautiful Bill Act" (officially H.R. 1) passed the House on May 22, 2025, by a narrow 215-214 vote. Among its many provisions, the bill notably does NOT extend enhanced ACA subsidies, which expire at the end of 2025. The bill is now in the Senate, where Majority Leader John Thune has set a goal of passing it by July 4, 2025.
These enhanced subsidies help millions of Americans afford individual or family health insurance through the ACA marketplaces. Without congressional action, we're heading back to the pre-pandemic subsidy levels, which means much higher costs for many people.
A Quick History: How We Got Here
Original ACA Rules (2010–2020)
Premium subsidies were available only to people earning 100%–400% of the federal poverty level (FPL)
If your income was above roughly $51,000 (single) or $104,000 (family of four) in 2020, you got zero help
Premiums were capped at varying percentages of income, up to 9.83% for those at 400% FPL
The Pandemic Changes (2021–2025) In 2021, the American Rescue Plan Act temporarily expanded subsidies, and in 2022, the Inflation Reduction Act extended these enhancements through 2025. The key changes:
Eliminated the 400% FPL income cap—anyone could qualify if their premium would exceed 8.5% of their income
Lowered premium contributions across all income levels, allowing people with incomes between 100-150% FPL to pay $0 in premiums for benchmark silver plans
What Happens in 2026? Without congressional action, the enhanced subsidies expire at the end of 2025, and we revert to the original, less generous rules.
What This Means in Real Dollars
The Congressional Budget Office projects that 4.2 million people will lose coverage due to subsidy changes alone. Here's what premium costs could look like if the enhanced subsidies expire:
45-year-old single woman, self-employed
Annual Income: $60,000
Monthly Premium (2025): $280
Monthly Premium (2026, projected): $600–$700
Annual Increase: $3,840–$5,040
55-year-old early retiree couple
Annual Income: $95,000
Monthly Premium (2025): $460
Monthly Premium (2026, projected): $1,200+
Annual Increase: $8,880+
60-year-old single woman, retired early
Annual Income: $80,000
Monthly Premium (2025): $400
Monthly Premium (2026, projected): $900–$1,100
Annual Increase: $6,000–$8,400
If Congress does not act, current ACA marketplace enrollees could see their premiums rise by an average of 75% or more in 2026. Some states will face even sharper increases—in 12 states using Healthcare.gov; average premium payments would at least double without the enhanced subsidies. Insurers are already submitting proposed 2026 rates that assume the enhanced subsidies will lapse.
Why This Matters to You
If you're self-employed, between jobs, retiring early, or don't have employer-sponsored health care—this could directly impact your wallet.
Since the enhanced subsidies took effect, ACA marketplace enrollment has grown by 88%, from 11.4 million in 2020 to over 24 million in 2025. States that President Trump won account for 88% of marketplace enrollment growth since 2020, so this isn't just a blue-state issue.
The recent growth has been driven primarily by low-income people, with signups by people with incomes up to 2.5 times poverty growing 115% since 2020. However, middle-income earners—the financial independence crowd—also benefit significantly from the current system.
What Happens Next
The Senate aims to pass its version of the One Big Beautiful Bill by July 4, 2025. Unlike culture-war provisions that might get stripped out, the subsidy expiration is budget-related and likely to survive the reconciliation process.
For the 2026 plan year, insurers must submit their proposed premiums by early 2025 and finalize them by August 2025, well before the November 2025 open enrollment period, which means we'll know the damage by summer.
What You Can Do
If you benefit from ACA subsidies—or care about keeping premiums affordable—this is the moment to pay attention:
Contact your senators. Senators Lisa Murkowski (R-AK) and Thom Tillis (R-NC) have expressed interest in extending the enhanced subsidies, showing this isn't purely partisan.
Plan ahead. Talk to your financial planner or insurance broker about 2026 scenarios. If you're considering early retirement or leaving a job, factor in potentially much higher healthcare costs.
Watch the calendar. The fall 2025 open enrollment period may be your last "normal" year for ACA pricing.
Spread the word. Forward this to your self-employed friends, yoga teacher, and neighbor who just left her corporate job. Nearly three out of four marketplace enrollees have incomes between 100-250% of the Federal Poverty Level, and many are small business owners or self-employed.
Final Thought
This change isn't just a health policy story—it's a personal finance story that could reshape the economics of independence. Enhanced subsidies have cut premium payments by an estimated 44% ($705 annually) for enrollees receiving premium tax credits.
Many Americans have built their budgets around affordable ACA coverage. If this bill passes as written, we could see a seismic shift that hits exactly the people this newsletter serves: the independent, the entrepreneurial, and the early retired.
The irony? This proposed change comes at a time when the enhanced subsidies have led to record enrollment growth, particularly in red states. Sometimes, the best programs are the ones that work so well you forget they exist—until they're about to disappear.
Sources: Congressional Budget Office, KFF, Commonwealth Fund, CNBC, NPR, and official congressional documents.
Thank you Cathy! Very informative. I am reaching out to my senator now.