The healthcare payroll hit stemming from termination of the Affordable Care Act enhanced subsidies

Healthcare providers would be at risk of losing more than 150,000 jobs in 2026 if the higher Affordable Care Act (ACA) marketplace subsidies expire at the end of this year, according to a new analysis.

In the analysis published by the Commonwealth Fund, researchers used economic modeling to project that providers would lose 154,000 jobs next year and the overall U.S. economy would shed more than 339,000 if ACA marketplace insurance becomes less affordable.

“Although the reduced tax credits originally affect amounts received by health insurance plans selected by marketplace enrollees, they inevitably lead to lower funding for hospitals, physicians, and clinics and pharmacies,” states the analysis, which was conducted by healthcare policy researchers with George Washington University (GWU).

The projected loss would amount to 0.9% of total employment in the healthcare industry based on 2024 job numbers.

Other research has found that spending on healthcare services would be $32.1 billion lower in 2026 if the subsidies expire, including a decrease of $14.2 billion at hospitals. Simultaneously, the burden of uncompensated care would rise by $7.7 billion industrywide, including $2.2 billion at hospitals, according to the study conducted by the left-leaning Urban Institute and sponsored by the Robert Wood Johnson Foundation

Any significant revenue reduction would affect whole communities, per the Commonwealth Fund analysis.

“Healthcare providers that lose revenue must reduce how much they can spend on their staff and goods purchased from vendors, including medical supplies, technology, consulting and capital,” the analysis states.

“These vendors in turn use that revenue to pay for labor and other goods. Reductions in labor expenses mean that some jobs are lost and some staff may be paid less. Thus, staff must restrict their purchases of consumer goods like food, transportation, rent and other needs.”

Assessing the impact on healthcare jobs

Findings in the Commonwealth Fund report were generated from a vendor’s proprietary economic model. For data inputs, the researchers used estimates from a separate report by the Urban Institute, which projected that 4.8 million additional people would be uninsured in 2026 if the higher subsidies expire. The Congressional Budget Office has put out lower numbers, projecting an increase of 2.2 million.

State economies would lose $40.7 billion in GDP, while state tax revenues would drop by $2.5 billion, according to findings that the GWU researchers described as conservative. Those cutbacks could affect healthcare budgets just as states attempt to grapple with the impact of Medicaid funding constraints legislated in the One Big Beautiful Bill Act.

Job loss would vary by state based on how many residents are enrolled in marketplace plans. Ten states would be projected to account for three-quarters of the healthcare job cuts, led by Texas (83,400) and Florida (57,500). Those two states and five others in the top 10 are among the 10 Medicaid non-expansion states, where coverage gaps could widen if people have a harder time maintaining ACA enrollment.

Where the ACA subsidies stand

The question of whether to renew the enhanced subsidies is a driver of the federal government shutdown that began Oct. 1. Democrats say such an extension must be part of a budget deal, while the Republican congressional majorities prefer to pass an extension of government funding and then discuss the subsidies.

With ACA marketplace open enrollment scheduled to begin Nov. 1 and run through Jan. 15, time is growing short to avoid disruption in the marketplaces heading into 2026. In an analysis, KFF estimated that out-of-pocket premiums would rise by 114% for enrollees, on average, and some low-income individuals and families could face annual increases of close to $800.

“Even if Congress extends or modifies the subsidies soon, it will take time and considerable effort for state and federal marketplaces to reprogram their computer systems to incorporate changes and inform consumers,” the Commonwealth Fund report states. “Delays and last-minute changes will create confusion among those seeking to renew their insurance coverage or who are considering enrolling for the first time.

“If Congress does not extend the enhanced tax credits [i.e., subsidies] by Nov. 1, there is a strong likelihood that higher premium costs will have already driven many Americans to drop their insurance coverage.”

Plan costs will spike for consumers who lose all or part of their subsidy, and in addition, insurers have raised baseline premiums, in part as a response to anticipated instability in the marketplaces.

A preview of higher ACA plan costs

Some marketplace plans already have sent out notices informing consumers of changes to their premiums. In an August analysis of preliminary rate filings, KFF found that the median increase in 312 health plans across 50 states was 18%. That would be the highest increase since 2018 and could contribute to a downward spiral in ACA marketplace viability.

“The expiration of enhanced tax credits will lead to out-of-pocket premiums for ACA marketplace enrollees increasing by an average of more than 75%, with insurers expecting healthier enrollees to drop coverage,” KFF wrote. “That, in turn, increases underlying premiums.”

CMS has sought to partially mitigate the expected coverage loss if the enhanced subsidies expire, putting out guidance expanding eligibility for high-deductible catastrophic health plans.

The plans will be newly available to people who no longer qualify for subsidized premiums, meaning households with income below 100% or more than 400% of federal poverty. Preventive care is available with no cost-sharing, as is required in ACA plans.

Consumers can seek to enroll in a catastrophic plan starting Nov. 1 by putting in for a hardship exemption at Healthcare.gov. Previously, the plans have been available only to people younger than 30 or those facing a specific hardship such as an eviction, a utility shut-off, domestic violence or certain other circumstances.