Millions face Higher Health Insurance Costs as ACA Subsidies Expire

why It matters

millions of Americans could see dramatically higher health insurance bills next year as enhanced Affordable Care Act (ACA) premium tax credits are set to expire. These subsidies lower monthly premiums for peopel across income levels, and their expiration raises the prospect of substantial increases for enrollees unless Congress acts.

The ACA marketplace, established in 2010, provides health insurance to individuals who don’t qualify for Medicaid and aren’t covered through an employer. In 2020,congress introduced Enhanced Premium Tax Credits to lower costs during the COVID-19 pandemic. These expanded subsidies significantly reduced monthly premiums-and for some low-income enrollees, brought them down to $0.

The Congressional Budget Office estimates that letting the subsidies lapse woudl more than double premiums for many enrollees and leave an estimated 2 million additional people uninsured.

States Facing Highest Increases

Analysis by KFF health indicates the financial impact will be most meaningful for older adults with middle incomes-particularly those slightly above the previous eligibility cutoff for ACA subsidies. The current enhanced credits provide the greatest benefit to those at 401 percent of the federal poverty level, which is $62,757 for an individual in the contiguous U.S. (higher thresholds apply in Alaska and Hawaii).