Steve Rattner is warning that health coverage could get a lot more expensive if Congress lets the enhanced Affordable Care Act premium tax credits expire at year end.
His warning tracks with a new KFF analysis that assumes a median 18% jump in gross marketplace premiums in 2026 and finds average out of pocket premium payments would more than double for subsidized enrollees if the richer credits disappear.
The same work highlights how the hit would fall hardest on older buyers and on households just above the subsidy cutoff.
The Urban Institute estimates that 4.8 million people would lose insurance in 2026 if the enhanced credits vanish, with steep increases in what middle and upper middle income households pay for benchmark plans after accounting for premium growth and the loss of aid.
Urban’s modeling also notes many consumers above 400% of the federal poverty level would be priced out entirely without the credits, which were created under the American Rescue Plan and extended through 2025 by the Inflation Reduction Act.
KFF’s scenarios show that a 60 year old couple earning about $85,000 could face more than $22,000 in higher annual premium payments in 2026 if the enhanced credits end and base premiums climb as proposed.
Younger buyers would see smaller increases, but their budgets would still be strained if subsidies shrink and rate filings hold.
The credits are set to sunset after plan year 2025 unless lawmakers pass an extension that decision now sits inside a broader funding fight that has already strained financial markets.
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Investors have been tracking the standoff as the White House talks collapse and as a U.S. shutdown starts. The path lawmakers choose will ripple through open enrollment messaging, 2026 pricing, and the enrollment mix that determines how profitable marketplace books can be.
If the credits lapse, membership could fall and the risk pool could skew older, which historically pushes up medical loss ratios that would force issuers to reprice aggressively for 2026 and revisit broker commissions, benefit designs, and narrow network strategies to defend margins.
If Congress extends or makes the credits permanent, enrollment and mix could hold closer to recent records, which would support scale and keep MLR volatility in check.
A drop in subsidized enrollment tends to raise uncompensated care and bad debt, which squeezes operating cash flow and can push systems to cut capital spending.
Safety net providers are most vulnerable, but the effect can spread to for profit chains if payer mix deteriorates. State budgets could also feel pressure if more residents revert to charity care or move onto state programs.
Plan documents and pricing for 2026 are not final, and issuers can update filings if Congress acts. The policy baseline will set marketing tactics and retention strategies during this fall’s outreach.
A volatile backdrop has already nudged traders to focus on policy headlines, with equities wobbling as a shutdown threat shadows quarter end.
