Will Obamacare Families Face Surging Health Care Premiums Next Year?

Health insurance premiums for many families in the United States are set to rise sharply next year as enhanced Affordable Care Act (ACA) subsidies expire. This change could significantly impact families like Leighanne Safford's, who may face a monthly premium leap from £278 to £1,800. With millions of Americans potentially affected, understanding the implications of this subsidy expiration is crucial.

Last updated: 12 October 2023 (BST)

Key Takeaways

• Enhanced ACA subsidies are set to expire on 31 December 2025, causing premium increases for many families.
• Nearly 4 million people may lose health insurance coverage if subsidies are not extended.
• Families with moderate incomes could see monthly premiums rise significantly, with some facing increases of £1,550.
• Health care professionals warn of a potential surge in uninsured patients and delayed care.
• Congress is still debating the possibility of extending these subsidies amid partisan differences.

Understanding the Affordable Care Act Subsidies

The Affordable Care Act, enacted in 2010, aimed to make health insurance more accessible and affordable for Americans. The enhanced subsidies introduced under the 2021 American Rescue Plan were a response to the financial strains caused by the COVID-19 pandemic. These subsidies made it possible for millions of middle-class families to afford health insurance, thus expanding coverage significantly.

As of 2025, over 24 million individuals are insured through ACA plans, with approximately 22.3 million qualifying for the enhanced subsidies. These figures underscore the importance of these financial aids in maintaining health coverage for many families across the country.

The Impending Subsidy Expiration

The expiration of these enhanced subsidies at the end of December 2025 raises critical concerns for families like the Saffords. Leighanne and her husband Lorry are already struggling to afford their health insurance, and the potential jump in their monthly premium could force them to make difficult choices about their healthcare and everyday expenses.

Projected Impact on Families

For many families, the effect of the subsidy expiration will be twofold: not only will they face increased premiums, but they will also lose the financial assistance that has kept their costs manageable. For instance, a family in Sacramento County earning £113,000 could see their monthly premium increase from £112 to approximately £1,662 if subsidies are not extended. This stark contrast highlights the economic burden many will face come January 2026.

Healthcare Access and the Rise of Uninsured Individuals

According to a Congressional Budget Office (CBO) analysis, nearly 4 million people are expected to lose their health insurance due to unaffordable premiums, with this figure projected to rise to nearly 7 million by 2034. This shift could lead to a significant increase in uninsured individuals across the country, as many will find themselves unable to afford necessary coverage without the enhanced subsidies.

A Double Whammy: Premium Increases and Subsidy Reductions

In addition to the subsidy expiration, insurance companies are expected to increase premiums by an average of 18% across the United States next year. This combination of rising premiums and reduced financial assistance presents a considerable challenge for families trying to navigate their health insurance options.

Widespread Effects on Health Insurance Buyers

According to KFF's analysis, the combined impact of subsidy expiration and rising premiums could lead to average monthly premium increases of 75%. This will not only affect those who rely on enhanced subsidies but also those who qualify for standard ACA subsidies, as government contributions toward premiums will decrease.

Cynthia Cox, vice president at KFF, remarked that "the effects are going to be pretty widespread," indicating that almost everyone purchasing their own health insurance will feel the impact in some way.

The Response from Healthcare Professionals

Healthcare professionals, such as Dr. David Zonies from the University of Washington, express concern about the possible consequences of losing enhanced subsidies. Dr. Zonies emphasises that many patients will likely delay necessary care due to financial constraints, leading to more severe health issues down the line.

As these patients become uninsured, the healthcare system may see a rise in emergency visits and hospitalisation rates, which could ultimately increase costs for everyone. The loss of these tax credits could push many families back to the pre-ACA landscape, drastically affecting their access to necessary medical services.

Political Landscape: The Fight for Subsidy Extension

As the deadline for extending subsidies approaches, political discussions continue. While Democrats advocate for extending the enhanced subsidies, many Republicans remain opposed. However, there are indications that some Republican leaders may be open to negotiations, which could lead to a potential extension.

Public Support for Enhanced Subsidies

A June report from KFF indicates that 75% of adults support extending the enhanced subsidies, including two-thirds of Republican respondents. This broad public support may influence lawmakers as they consider the implications of allowing the subsidies to expire.

Potential Outcomes of Congressional Action

The possibility of extending the enhanced subsidies remains uncertain, but experts like Edwin Park and Cynthia Cox suggest that if Congress does act, the new terms may not be as generous as those previously offered. Families may be forced to adjust to lower levels of financial assistance, further complicating their health insurance decisions.

The Transition to High-Deductible Plans

As families like the Saffords prepare for the worst-case scenario, many are considering switching to high-deductible health plans. While these plans typically have lower monthly premiums, they require individuals to pay a higher amount out-of-pocket before coverage begins. This shift may provide some financial relief, but it also poses risks if unexpected health issues arise.

Cox notes that while high-deductible plans can protect against exorbitant medical expenses, they also demand careful financial planning from families, especially those with limited budgets.

What Happens Next?

As open enrollment for ACA plans begins on 1 November, families will need to make crucial decisions about their health insurance coverage. The "sticker shock" of increased premiums and the uncertainty surrounding the subsidy expiration will weigh heavily on many households as they navigate their options.

For families like the Saffords, the hope remains that Congress will act to extend the enhanced subsidies, providing much-needed stability and peace of mind as they face an uncertain health insurance landscape.

FAQs

What are the enhanced Affordable Care Act subsidies?

Enhanced ACA subsidies are financial aids that help lower the cost of health insurance premiums for eligible individuals and families, making health coverage more affordable. These subsidies were initially introduced in response to the COVID-19 pandemic.

When do the enhanced subsidies expire?

The enhanced subsidies are set to expire on 31 December 2025, unless Congress takes action to extend them. The expiration could lead to significant premium increases for many families.

How many people are projected to lose health coverage if subsidies expire?

Nearly 4 million individuals are projected to lose health coverage if the enhanced subsidies are not extended, with that number potentially rising to nearly 7 million by 2034.

What is a high-deductible health plan?

A high-deductible health plan is a type of health insurance that typically has lower monthly premiums but requires higher out-of-pocket costs before coverage begins. These plans can offer financial protection against high medical expenses.

Why is there concern about the loss of subsidies among healthcare professionals?

Healthcare professionals are concerned that the loss of subsidies will lead to an increase in uninsured individuals, causing patients to delay necessary care and potentially worsening their health outcomes.

Conclusion

The impending expiration of enhanced ACA subsidies poses a significant challenge for millions of families across the United States. As they prepare for potential premium increases and difficult decisions regarding their health insurance options, the hope for an extension remains. The outcome of ongoing political discussions will ultimately determine whether families will continue to receive the financial support needed to maintain their health coverage. In this uncertain landscape, understanding the implications of these changes is critical for making informed decisions about health insurance. #HealthInsurance #AffordableCareAct #SubsidyExpiration