When the Enhanced Subsidies Die How Much Will You Pay Then?
Please take note of the charts and numbers for a half a dozen states detailing the damage to healthcare by Republicans taking no action on ACA subsidies. It will occur in all of the states. I chose these states as an example as they also had complete numbers to cite.
“How Much Will ACA Premium Payments Rise if Enhanced Subsidies Expire?” KFF
Enhanced Affordable Care Act (ACA) subsidies were first made available as part of the American Rescue Plan Act in 2021 and were extended through the end of 2025 by the Inflation Reduction Act. The enhanced subsidies build on the ACA’s original tax credits by increasing the amount of premium assistance lower-income enrollees receive, and by making middle- and higher-income enrollees (with incomes over four times poverty) newly eligible for financial assistance to buy health insurance. These enhanced subsidies will expire at the end of this year unless Congress further extends them and President Trump signs it into law. In 2024, 56% of ACA Market Place enrollees live in Congressional Districts represented by Republicans and 76% of enrollees are in states won by President Trump in the 2024 election.
If the enhanced subsidies expire, monthly premium payments for the vast majority of Marketplace enrollees will increase sharply starting January 1, 2026. Among subsidized enrollees living in states that use Healthcare.gov (where data are available), premium payments would have been an average of 93% higher in 2024 without the enhanced tax credits. If these enhanced subsidies expire, the Congressional Budget Office (CBO) projects that there will be an average of 3.8 million more uninsured people each year. Unsubsidized premiums will also likely rise as healthier enrollees drop their coverage. While some state-based Marketplaces offer additional premium financial assistance for certain enrollees, the amount of and availability of these state subsidies would not be enough to fully replace the federal enhanced subsidies.
The interactive (KFF site has an interactive map) map below illustrates how much premium payments would rise without the enhanced subsidies, net of tax credits, at the congressional district level. The tool presents average net premium increases (states that use Healthcare.gov,) There are also two hypothetical scenarios (in all states). One for an older couple who would lose subsidy eligibility due to their income exceeding four times poverty. Another graph for a single individual with a $31,000 income (206% of poverty). The KFF calculator allows users to evaluate zip-code specific changes in premium payments with and without enhanced subsidies for other income and family scenarios (the KFF site has an interactive Map).
Nationwide Average Premium Increase
Because enhanced tax credits decrease premium payments across the board for people receiving a tax credit, all subsidized Marketplace enrollees will experience increases in their monthly premium payments if the enhanced subsidies expire. However, how much each enrollee’s premium payment increases will vary widely and will depend on their family size, location, and income.
Nationwide Average ACA Premium Increase
40-Year Old Single Making $31,000. Note Alaska Premium increase.
Nationwide Average ACA Premium Increase
60-Yeqr Old Couple Making $82,000. Note Alaska Premium Increase,
Average Increases in Premium Payments Among Subsidized ACA Enrollees
In some congressional districts, there is a large share of the population participating in ACA Marketplace coverage. There is also a expectation of very high average increases in premium payments without the enhanced tax credits. Among states using Healthcare.gov (where average enhanced tax credit data are available), there are 39 congressional districts where approximately 10% of the population is enrolled in the ACA Marketplaces.
Also their 2024 average premium payments would have been double or more had it not been for the enhanced subsidies (Table 1). These 39 districts are politically split (19 are represented by Democrats and 20 are represented by Republicans). The districts are mostly concentrated in a few red states. Twenty of these 39 districts are in Texas, 7 are in Florida, and 3 are in Georgia. These states are among those that have seen ACA Marketplace enrollment grow the most since the enhanced subsidies went into effect. Since 2020, ACA Marketplace enrollment has more than doubled in Florida and more than tripled in Texas and Georgia.
Increases in Premium Payments for An Older Couple on the “Subsidy Cliff”
The expiration of the enhanced premium tax credits would mean that people with incomes over four times the poverty level are no longer eligible for financial assistance. Prior to the availability of enhanced subsidies, ACA Marketplace premium assistance eligibility capped at 400% of poverty (which is $60,240 for a single person or $81,760 for a couple in 2025). If enhanced subsidies expire, Marketplace enrollees making just above 400% of poverty will encounter the “subsidy cliff” and would face the full price of a Market Place plan. If the enhanced subsidies expire, a 60-year-old couple making $82,000 (401% of poverty) would see their premium payment for the benchmark silver plan, on average, at least double in the vast majority of congressional districts. The benchmark silver premium for a 60-year-old couple at this income would triple or more, on average, in 328 congressional districts.
Premium Increases for Lower-Income Enrollees
A 40-year-old Marketplace enrollee in the contiguous U.S. making $31,000 (206% of poverty) would see monthly premium payments in 2025 rise by $95 (a 165% increase) from $58 to $153. (Alaska and Hawaii have different poverty guidelines). Nationally, there are 75 congressional districts where at least 10% of the population is in the Marketplace. For a 40-year-old making $31,000, premium payments would at least double on average in all 75 districts. 62 of these districts are in Florida, Georgia and Texas. 38 of these 62 districts are represented by Republicans while 24 are represented by Democrats.
Under the enhanced phase out caps, Marketplace enrollees with incomes up to 150% of poverty currently pay zero (or near zero) dollars for a benchmark silver plan. Should the enhanced subsidies expire, enrollees in this income group will be on the hook for some of the cost of their premiums if they want to keep a silver plan. Before the enhanced subsidies went into effect, Marketplace enrollees at this income group paid about 2-4% of their income for a benchmark plan. A sizeable portion of the Marketplace population benefits from zero-dollar premiums, with 42% of HealthCare.gov enrollees in 2024 paying nothing for Marketplace coverage (up from 14% of HealthCare.gov enrollees in 2021).
Sampling of Some States of Before and After ACA Subsidies (the graphs/charts are mine).
Reality is just around the corner. I suspect many people will drop healthcare cover as it will again be too expensive. To get an idea of the increases in ACA healthcare insurance costs? I basically too the date for various charts from the article about and as show here: “Congressional District Interactive Map: How Much Will ACA Premium Payments Rise if Enhanced Subsidies Expire?” KFF And no, none of this commentary is interactive.
I wanted to pull California and New York numbers also.. Neither of those states has complete numbers. I did choose some states which had larger populations.
Bottom line? Once again, healthcare insurance will become too expensive thanks to Republican efforts. But there is also another issue to be understood. The 2024 vote election was ~ 3 million votes shy as compared to the 2020 election. That was enough votes to put Kamala Harris into the White House. If you do not turn out and vote, this is what you get.
To enlarge, click on the Graph.
Florida ACA
Georgia ACA
Illinois ACA
Michigan ACA
Ohio ACA
Texas ACA
Hope this helps you to understand what if coming down the road. Not much can be done to stop it unless Republicans get a soul again.
I understand that this an advocacy piece here, but a bit of extra, useful information would be the estimate change to aggregate federal subsidies if the enhanced premiums are restored. We hear that 3.8 million may lose coverage, but what is the cost of avoiding this? Is it a sensible use of the incremental money to have a subsidy program to attract participants likely heavily skewed to better health? With a model that predicts individual subsidies and also forecasts decisions to participate, aggregate subsidies should be pretty easy to estimate. Are we talking an extra $3B/year? An extra $25b? More, maybe? This should make a real difference in how to think this through.
@Eric,
What is the cost of the tax cuts for the 1% and corporations in the BBB? Is it sensible to have a subsidy program to benefit participants likely heavily skewed to greater wealth?
“On July 4, 2025: We estimate the One Big Beautiful Bill Act passed into law will increase long-run GDP by 1.2 percent and reduce federal tax revenue by $5.0 trillion from 2025-2034 on a conventional basis. Dynamic feedback will reduce the revenue loss of the bill by about 19 percent to $4.1 trillion, while spending reductions of nearly $1.1 trillion will reduce the dynamic deficit increase to $3 trillion from 2025-2034.” Tax Foundation
@Bill,
If the right-wing Tax Foundation admits that the OBBBA will blow up the deficit, just imagine what reality looks like! “Dynamic scoring” is just a phony Laffer Curve accounting trick.
Joel:
You are lecturing me on the Laffer Curve. I am laughing not at you but with you.
Bill
The “whataboutism” of the BBB is absurd really. This is an important public policy decision that at the highest level is to commit additional public funds to accomplish something. Bill, I’m positive, went through similar situations hundreds of times in his sourcing career where eventually a root question was “how much more and what does that get us?”. This level of analysis suggests very strongly to me that the incremental level of aggregate subsidies was calculated. If the “how much more” here was tied to “we get ‘this’” and there is a big consensus that ’this’ was well worth the money, then not saying that explicitly makes no sense. My sense of this is that the number of AVA policies sold is getting interpreted as “more = better”. Selling more means chasing customers who do not put a high value on this insurance. You chase them through price, but the rules force you to lower the prices on lots of policies for folks that value it much higher. They should restore the mandate penalties instead. Much better targeting of the actual people you want to influence. If Republicans and Democrats hold hands on this, might be possible.
@Eric,
“If Republicans and Democrats hold hands on this, might be possible.”
LOL! If wishes were horses, then beggars would ride.