Obamacare families face higher health insurance premiums next year
Leighanne Safford and her husband, Lorry, pay just $278 a month for health insurance. But starting January 1st, their monthly premiums could soar to $1,800.
With the Affordable Care Act's enhanced subsidies expiring at the end of December, the Saffords are among millions of families who could be forced to pay hundreds of dollars more for health insurance next year.
The enhanced subsidies were put into place under the 2021 American Rescue Plan, which made ACA plans affordable for many middle-class families. The Inflation Reduction Act of 2022 extended the subsidies through 2025.
The Republican-controlled Congress, however, didn’t extend the subsidies in either of the two major funding bills passed so far this year. It’s uncertain whether Republicans will extend them later this month in a bill to keep the government funded.
For Safford, the impact is likely to be exacerbated by the rollbacks of Medicaid expansion in the massive bill signed by President Trump this summer. She worries her 13-year-old son, Adam, might lose his Medicaid, so the family plans to pay for his health insurance in 2026.
The enhanced subsidy, implemented under the 2021 American Rescue Plan, made Affordable Care Act (ACA) plans more affordable for many middle-class families. The 2022 Inflation Reduction Act extended the subsidy until 2025.
However, the Republican-controlled Congress has omitted extending the subsidy in either of the two major appropriations bills passed so far this year. It is unclear whether Republicans will extend the subsidy in a bill aimed at maintaining government funding later this month.
The enhanced subsidy, implemented under the 2021 American Rescue Plan, made Affordable Care Act (ACA) plans more affordable for many middle-class families. The 2022 Inflation Reduction Act extended the subsidy until 2025.
However, the Republican-controlled Congress has omitted extending the subsidy in either of the two major appropriations bills passed so far this year. It is unclear whether Republicans will extend the subsidy in a bill aimed at maintaining government funding later this month.
The enhanced subsidy, implemented under the 2021 American Rescue Plan, made Affordable Care Act (ACA) plans more affordable for many middle-class families. The 2022 Inflation Reduction Act extended the subsidy until 2025.
However, the Republican-controlled Congress has omitted extending the subsidy in either of the two major appropriations bills passed so far this year. It is unclear whether Republicans will extend the subsidy in a bill aimed at maintaining government funding later this month.
According to a 2024 analysis by the Congressional Budget Office (a nonpartisan agency that advises Congress on budget and economic issues), if the enhanced subsidies expire, nearly 4 million people are projected to lose their health insurance by 2026 due to an inability to pay their premiums. By 2034, that number is expected to surge to nearly 7 million.
If Congress fails to act, "millions of people will lose their health insurance," said Edwin Parker, a research professor at Georgetown University's McCourt School of Public Policy. "Without these subsidies, health insurance costs will be much higher."
A double whammy
Open enrollment for next year's ACA plans begins November 1st.
But for many families, the real shock comes in October, when they receive official notices detailing next year's monthly premiums, said Jessica Altman, executive director of Covered California, the state-wide ACA insurance marketplace.
"There's a lot of fear," she said. "Whether it's people with cancer or chronic conditions who know they need insurance, or people who think, 'I might just have to give up and cross my fingers.'"
For example, Altman said, in Sacramento County, a family of four earning $113,000 a year could see their monthly premiums increase by about $1,550 if the government subsidies expire, compared to only $112 if the subsidies remain in effect.
Beyond the subsidy expiration, states must also consider the premium increases expected by insurers next year.
Altman said it's a "double whammy of rising premiums and a potential reduction in tax credits." A report from Kennedy Family Insurance (KFF) found that insurers offering ACA plans projected average premium increases of approximately 18% nationwide by 2026. Combined with the elimination of subsidies, the average premium could increase by 75%, according to KFF.
Cynthia Cox, vice president and director of ACA programs at KFF, said those who still qualify for ACA subsidies wouldn't be immune. Without the increased subsidies, the government would pay them less in monthly premiums.
"The impact is going to be very widespread," Cox said. "Almost everyone who has health insurance is going to be affected in one way or another."
In Safford's home state of Washington, Dr. David Zonis said many of his patients will be directly affected. Zonis is the medical director of University of Washington Harborview Medical Center, a safety-net hospital that primarily serves Medicaid and Affordable Care Act (ACA) patients.
He said the elimination of enhanced subsidies, combined with cuts to Medicaid, means many patients will lose insurance and delay needed treatment until their condition becomes more severe.
“My biggest concern right now is the elimination of these tax credits,” Zonis said. “We anticipate that we’ll essentially be back to where we were before the Affordable Care Act was passed, and that would be devastating.”
A spokesman for AHIP, the main industry trade group representing insurers, including those that sell ACA plans, did not respond to a request for comment.
The Fight to Extend Subsidies
Parker said Congress could still extend the increased subsidies—either as part of a government funding package or as a separate bill. The latest government spending bill expires on September 30.
“It’s hard to predict,” he said.
Democrats continue to advocate for extending the subsidies, while many Republicans remain opposed.
But Senate Majority Leader John Thune, a South Dakota Republican, told NBC News earlier this month that he remained open to a possible extension.
“Yes, some of our members are looking at it,” Thune said. But he also accused Democrats of expanding the program and phasing out subsidies.
House Speaker Mike Johnson, R-La., has been noncommittal on the issue, but he similarly kept the door open to a funding extension.
Altman said Congress needs to figure out what it wants to do quickly, noting that an extension would provide not only “peace of mind” for many families, but also security in their health care and economic freedom.
A June KFF report found that three-quarters of adults support extending the enhanced subsidies, including two-thirds of Republicans.
Parker said the enhanced subsidies passed by Republicans would likely differ from those previously implemented by Democrats.
“I do expect that if congressional Republicans are willing to negotiate an extension of the enhanced subsidies, they may seek to reduce their generosity,” he said.
Cox says some families may choose to sacrifice their budgets to maintain their existing insurance, but most, like the Saffords, will likely switch to high-deductible plans. While participants in these plans pay more out-of-pocket before receiving coverage, they are designed to protect them from potentially devastating medical bills.
“Let’s say you get hit by a bus, have cancer, or need some very expensive treatment. These plans can protect you from the high costs of a hospital stay,” Cox says.
Cox says some families may choose to sacrifice their budgets to maintain their existing insurance, but most, like the Saffords, will likely switch to high-deductible plans. While participants in these plans pay more out-of-pocket before receiving coverage, they are designed to protect them from potentially devastating medical bills.
“Let’s say you get hit by a bus, have cancer, or need some very expensive treatment. These plans can protect you from the high costs of a hospital stay,” Cox says.