For years, enhanced subsidies have provided critical support to low- and middle-income individuals, lowering monthly premiums for ACA enrollees. But with these subsidies set to expire at the end of 2025, millions will experience dramatic premium increases. According to the Kaiser Family Foundation (KFF), the average premium for the benchmark ACA plan will increase by 26%, and in some states, enrollees could see their monthly payments more than double.Â
The Financial Impact of Expiring Subsidies
The expiration of the enhanced subsidies will leave many Americans facing premiums they cannot afford. Currently, more than 90% of ACA enrollees receive some form of financial assistance with their monthly premiums. However, once the enhanced tax credits are no longer available, many will find themselves paying far higher costs for their plans. For example, a person making $28,000 a year, who currently pays around $27 per month, could see their premium skyrocket to over $130 in 2026, according to KFF.
In states that run their own health insurance exchanges, such as New Jersey and Colorado, the effects will be even more pronounced. Premiums in these states are projected to increase by over 100% in some cases, leaving many individuals and families scrambling for affordable options. The loss of subsidies will also disproportionately affect individuals and families in non-expansion states, where Medicaid has not been expanded. These enrollees will not only lose their subsidies but will also have no safety net to fall back on for coverage.
Political Gridlock and Its Consequences
The fate of the enhanced subsidies has become a major point of contention in Washington, D.C. With the U.S. government facing a shutdown, Democrats have pushed for an extension of these subsidies as part of a short-term funding deal. They argue that failing to extend the subsidies will result in millions of Americans losing coverage or being forced to pay unaffordable premiums. Republicans, on the other hand, have been resistant to such proposals, citing concerns over government spending and potential fraud within the ACA marketplace.
The stakes are high, as the expiration of these subsidies will have a profound impact on ACA enrollment and coverage. According to KFF, a reduction in subsidies will lead to a drop in enrollment, particularly among low-income individuals. Without assistance, many people will likely drop out of the marketplace altogether, pushing the number of uninsured Americans even higher.
Further complicating matters, the Trump administration slashed funding for navigators who assist consumers in choosing the right plans, making it harder for individuals to understand their options and adjust to the changing costs. While some enrollees will still be able to find plans with premiums under $50 a month, the overall impact of the subsidy loss will be felt by millions who will no longer be able to afford insurance.
As the open enrollment period approaches, many Americans are bracing for a financial strain they are not prepared for. Health insurance, once a critical safety net, may soon become a luxury for those unable to access the subsidies that have kept premiums within reach for so many.
