Black Families Face Financial Crisis as Affordable Care Act Subsidies Expire

As folks across the nation welcomed the new year with champagne toasts, midnight kisses or watchight services, roughly 1.1 million Black families teetered at the edge of an economic unraveling. While the world watched the 12,000-pound Waterford crystal ball drop in New York City, the stroke of midnight marked the expiration of the Affordable Care Act (ACA) subsidies, triggering a wave of unaffordable care set to flood Black households.

The Associated Press shared a KFF analysis showing that people with ACA subsidies could see their premiums increase by an average of 114 percent in 2026. Some families may see their costs double, triple, or more. The biggest increases will affect those who do not qualify for Medicaid or Medicare, such as small business owners and gig workers in the shrinking middle class.

A Crisis For the Black Working Class

Losing affordable coverage could undo years of progress in closing racial gaps in health insurance. The Economic Policy Institute (EPI) estimates that ending the subsidies may leave 170,000 Black Americans without insurance, make Black households pay $740 million more each year, and lead to over 200 preventable deaths annually in cities like Atlanta, Houston, Dallas, and Miami.

The economic consequences don’t end there for these cities, which are home to large Black populations. The EPI projects that these metropolises will lose more than $1.9 billion a year as healthcare costs choke out consumer spending. The ripple effect: shrinking Black household budgets that squeeze necessities like food, rent, and childcare while stifling the ability to save and build wealth. The impact is expected to intensify long-standing economic inequalities, further eroding a fragile middle class.

The ACA Narrowed The Health Care Gap

ACA subsidies were first enacted in 2021 as COVID-19 pandemic relief and were later extended through January 2026. These subsidies lowered monthly health insurance costs purchased through the ACA marketplace. The federal government paid a larger part of the premium upfront, allowing enrollees to pay much less each month. Under the expansion, which Congress failed to extend, the income cutoff was removed, premiums were capped at 8.5 percent of income, and many lower-income enrollees paid little or nothing for coverage. Today, 24 million people have ACA benefits. According to KFF, about half of ACA  enrollees live at or just above the poverty line.

Despite its challenges, the ACA led to notable gains. In 2022, the Department of Health and Human Services found that ACA enrollment among African Americans rose by 49 percent in the first two years of expanded subsidies. By removing the “subsidy cliff,” the policy made coverage more stable for lower-income families and allowed more middle-class families to qualify.

Now, those gains are at risk.

An Uncertain Future

The AP reports that a House vote in January could give lawmakers another chance to restore the subsidies, but it is unclear whether it will pass.

In the meantime, families are facing heartbreaking choices: whether parents will get coverage for themselves or their children, whether they will pay for healthcare or housing, and in some cases, whether their impossible decisions will determine who gets life-saving care and who does not.