Forbes December 1, 2025
More than a decade after the Affordable Care Act (ACA) reshaped the individual health insurance market, the debate in Washington is once again focused on reform efforts. One key question is whether to extend the “enhanced” premium subsidies introduced during the pandemic. But the question of whether to extend the subsidies continues to obscure a more fundamental issue: the ACA’s subsidy system creates a set of incentives for households, insurers and federal spending that deserve closer scrutiny.
To understand today’s debate, it is helpful to revisit how the ACA subsidy structure was originally designed — and how it changed during the pandemic, and what can be done to stabilize it for the future.
How the Original ACA Subsidies Worked
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