“`html
Healthcare workers protest outside a Kaiser Permanente medical center in Baldwin Park, California, the United States, Oct 4, 2023. [Photo/Xinhua]
Millions of Americans who rely on Affordable Care Act (ACA) marketplace coverage are bracing for significantly higher health insurance costs in 2026, as crucial subsidies are set to expire at the end of this year.The potential price hikes are sparking anxiety and raising questions about access to care for those who’ve come to depend on the financial assistance.
Subsidy Cliff Looms for ACA Enrollees
Enhanced premium subsidies, introduced during the COVID-19 pandemic, are at risk of disappearing, potentially doubling premiums for many.
- Approximately 22 million people currently benefit from the enhanced subsidies, representing over 90 percent of all ACA marketplace enrollees.
- Without the subsidies, average premiums are projected to more than double, creating a substantial financial burden for individuals and families.
- Small business owners and self-employed workers, who often rely on the ACA as an alternative to employer-sponsored insurance, are notably vulnerable.
- Political divisions in Congress are creating uncertainty about whether the subsidies will be extended.
Currently, the enhanced subsidies make coverage affordable for many who would otherwise struggle to pay. However, as KFF reports, “for people with incomes between 100% and 400% of the federal poverty level, the subsidies cap premiums at around 8.5% of income.But for those earning slightly more, income isn’t enough to cover the full, unsubsidized premium.“
“It’s virtually guaranteed at this point the subsidies will expire” at the end of 2025, said Emma Wager, a senior policy analyst at KFF, in an interview with CNBC. “What happens (in Congress) in january remains to be seen.”
Age and Income Amplify the Challenge
age further complicates the situation. Early retirees who aren’t yet eligible for Medicare frequently enough face significantly higher insurance prices, as insurers are permitted to charge older adults more than younger consumers. KFF estimates that a 60-year-old earning slightly above the subsidy threshold could see their health premiums jump from around 8.5 percent of their income to over 20 percent if the enhanced aid disappears.
Nick Fabrizio, a health policy expert and professor at Cornell University, explained that the expiration will “affect anyone getting those subsidies.” He added, “Then it’s a question of who’s in those groups: Who are the most vulnerable?” in a conversation with CNBC.
What happens if the ACA subsidies expire? The loss of these subsidies could force millions to forgo coverage, leading to poorer health outcomes and increased financial strain.
The potential loss of coverage is adding to the anxiety of households already struggling with rising costs for housing, food, and energy. Kathy Many,who co-owns a small garage-door installation and repair business in Vermont with her husband,expressed fears of financial ruin if a serious accident or illness occurs while uninsured. “Everything that I’ve worked my whole life for could be lost to bankruptcy,” she told CNN.
The impact of the expiring subsidies is expected to be uneven across the country. According to KFF and the Bipartisan Policy Center, most of the growth in ACA enrollment as 2020 has been in states that voted for Donald Trump in the 2024 election, particularly in the South. These states also have larger Black and Latino populations, groups that have seen significant gains in coverage thanks to the enhanced subsidies.
While a small group of Republicans in the House of Representatives has joined Democrats in pushing for a vote to extend the subsidies, similar legislation has already failed in the Senate, highlighting the political obstacles ahead. Analysts warn that even a short lapse in subsidies could lead to people losing coverage as households react to higher premiums.
<
