health Insurance Costs Set to Soar for Millions as Tax Credits Face Expiration
Millions of Americans could see their health insurance premiums rise substantially at the end of 2025 if Congress fails to extend enhanced premium tax credits currently available through the Affordable Care Act (ACA) marketplaces. The looming expiration threatens to disrupt coverage for 25.2 million individuals, particularly those who rely on these subsidies to make insurance affordable.
For Carol Kolseth, a wheat adn alfalfa farmer from Plummer, Minnesota, the potential loss of these credits is a stark reality. after receiving a cancer diagnosis in October 2024, Kolseth and her husband enrolled in a Blue Cross Blue Shield plan through the ACA marketplace. Their income qualified them for a tax credit that substantially lowered their monthly premium. Though, that assistance is set to expire, leaving them facing a potential increase from $1,603 per month to $1,972.
The Kolseths’ situation is emblematic of a broader challenge facing Americans who do not have access to employer-sponsored health insurance. Many are self-employed or small business owners,and rely on the ACA marketplaces for coverage. In 2023, a remarkable 93% of individuals with an ACA plan received a premium tax credit, highlighting the widespread reliance on this financial assistance.
These enhanced premium tax credits where initially enacted in 2021 through the american Rescue Plan Act, aiming to expand affordability for those earning over 100% of the federal poverty line and ineligible for Medicaid or the ChildrenS Health Insurance Plan (CHIP). The Inflation Reduction Act of 2022 extended the credits through the end of 2025, but without further congressional action, they will lapse.
The impact of the credits has been substantial. Enrollment in ACA marketplace plans has surged from 9.7 million in 2021 to 21.8 million in 2025, according to data from the Center on Budget and Policy Priorities. The credits have proven particularly beneficial in states that have not expanded Medicaid, such as Alaska, Kansas, and Wyoming.
“Rural areas have fewer people living across a greater area,” explained Elizabeth Zhang, a research assistant on the health policy team at the Center on Budget and Policy Priorities. “This discourages competition between health plans and also makes it harder for health plans to spread out healthcare costs and risks among enrollees.” This dynamic contributes to higher premiums for rural residents, making the tax credits even more critical.
Farming ranks as the fourth-most common occupation among those utilizing individual marketplace coverage, following chiropractors, musicians, and real estate agents. This underscores the importance of affordable health insurance for those working in agriculture, a sector often characterized by fluctuating incomes and limited access to conventional benefits.
The deadline to enroll in individual health coverage for 2026 is December 15th, meaning Congress must act before then to prevent a significant disruption in coverage and a substantial increase in premiums for millions of Americans. The future of affordable healthcare access hangs in the balance as lawmakers weigh the fate of these vital tax credits.
Why: Enhanced premium tax credits enacted through the American Rescue Plan Act (2021) and extended by the Inflation Reduction Act (2022) are set to expire at the
