By: TAHP | Friday, August 1, 2025

What’s new: Monthly health insurance costs are projected to surge in 2026 unless Congress acts to extend enhanced tax credits. These tax savings – first expanded in 2021 – are set to expire at the end of 2025, triggering double-digit increases for families who buy their own coverage. If Congress doesn’t act, more than 1.7 million Texans could lose coverage, reversing recent gains and raising costs for everyone left behind.

Why it matters: Texas has more people buying their own health insurance than almost any other state. Without action, what families pay each month could rise by 75% or more, making coverage unaffordable and pushing many Texans to drop their plans.

The numbers don’t lie:

• Nearly 4 million Texans currently buy their own coverage.
• 95% of them receive federal tax credits to lower their monthly costs – 3.3 million Texans.
• On average, Texans receiving help pay just $34/month today—but that number could climb sharply if tax credits expire.
• Texas already ranks fifth-highest in health care costs nationwide.

The big picture: These federal tax credits have played a major role in lowering health care costs and reducing the number of uninsured Texans. But that progress is now at risk:

• Since 2020, the number of Texans buying their own coverage has more than tripled, largely because more people became eligible for tax credits.
• Texas did not expand Medicaid. Instead, the state has relied on federal tax credits to help working families buy private health coverage – and most of the Texans who would’ve qualified for Medicaid are now covered this way.
• If Congress doesn’t act, more than 1.7 million of these Texans could lose coverage, reversing recent gains and raising costs for everyone left behind.

What’s driving the threat:

• Tax credits are set to expire: Monthly costs could rise more than 75% for most families.
• Health care prices are rising: Hospital care, prescriptions, and other medical costs continue to increase.
• Proposed eligibility changes could make it harder to qualify or stay enrolled—leading to more uninsured Texans.
• As monthly costs climb, many healthier Texans are expected to drop coverage, leaving behind a smaller, sicker group with higher medical needs. That shift will drive costs even higher and destabilize the market further.

Meanwhile: A coalition of doctors, insurers, and patient advocates are urging Congress to extend tax credits to avoid millions from becoming uninsured.

The bottom line: If Congress doesn’t act, many Texans, especially working families, will no longer be able to afford coverage.