Changes to the Affordable Care Act supported by Republicans could have consequences beyond just rising health insurance bills. A new economic report from impact modeling firm IMPLAN found that increases in Affordable Care Act (ACA) marketplace premiums could ripple through the broader economy as consumers have less money available to spend elsewhere and ultimately lead to a loss of more than 1,500 jobs and approximately $60 million in gross domestic product. Maybe that’s one less restaurant visit a month, or less discretionary income,” Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek.
Those expanded subsidies, originally enacted under the American Rescue Plan Act in 2021 and later extended through 2025 by the Inflation Reduction Act, had increased the amount of financial assistance available to eligible marketplace customers and expanded eligibility to some higher-income households. Similar research from The Commonwealth Fund and George Washington University's Milken Institute School of Public Health estimated that the expiration of the enhanced credits could ultimately result in nearly 340,000 fewer jobs nationwide in 2026, with slightly less than half of those losses occurring in healthcare. The ACA changes are generally discussed in terms of how much Americans will pay for health coverage, but the economic effects could reach well beyond people insured through the marketplace.
When federal subsidies decline and consumers pay more toward their health coverage, fewer federal dollars flow into state economies. At the same time, people who drop insurance may use less healthcare, reducing revenue for doctors, hospitals, and pharmacies. George Washington University and The Commonwealth Fund also projected that the loss of the enhanced tax credits would reduce federal funding for marketplace subsidies by $31 billion.
The resulting direct and downstream effects reportedly could shrink state economies by $40.7 billion and reduce state and local tax revenue by $2.5 billion in 2026. Under the enhanced premium tax credits, the federal government provided more generous assistance to people purchasing coverage through ACA marketplaces. The subsidies originated with the 2021 American Rescue Plan and were extended through 2025 under the Inflation Reduction Act.
They made larger subsidies available to qualifying households and expanded assistance beyond the ACA's previous income limits. However, these subsidies expired at the end of 2025. That does not mean ACA premium tax credits disappeared altogether.
Instead, the enhanced provisions ended and the subsidy structure reverted to the ACA's less generous rules. The Congressional Research Service said the change would result in larger premium contributions and smaller subsidy amounts for eligible households purchasing 2026 coverage. Gross premiums have risen as well.
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