AUSTIN (Nexstar) — The cost of monthly premiums for millions of Americans who are insured through the Affordable Care Act marketplace are forecasted to on average more than double next year if Congress does not extend subsidies that expire at the end of 2025, according to a nonpartisan health policy research center.
Democrats are trying to pass a proposal that will avert a government shutdown while also extending the healthcare subsidies — known as enhanced premium tax credits — ahead of midnight Tuesday. Republicans are against the proposal and the partisan sparring is expected to lead to the first government shutdown since 2018.
Who is impacted?
Enhanced premium tax credits were first introduced in 2021 in the American Rescue Plan. It increased the amount of savings on monthly premium costs and expanded the amount of people eligible to receive the subsidy. The tax credits only affect people who purchase insurance for themselves or their families and not people who have insurance through their job.
“So this is for people who maybe are self employed, have a small business or otherwise, don’t get insurance through their jobs,” said Emma Wager, a senior policy analyst for KFF, the nonpartisan organization that analyzed the impact of these subsidies expiring.
The expiring subsidies would also not impact anyone on Medicaid or Medicare. Wager said about 22 million Americans receive a tax credit to help pay for the monthly premium cost in the individual market. That is over 90% of the people who pay for insurance in the individual market.
In Texas, that share is even larger. Wager said 3.8 million Texans are in the individual market and 97% of them receive some type of help to pay for the monthly premium. Enrollment into the individual market tripled in Texas after the enhanced premium tax credits were introduced, according to Wager.
About a quarter — 27% — of American farmers, ranchers, and agriculture managers are in the individual market, according to the KFF analysis. Wager explained that is a group that has a risk of seeing higher premiums in the subsidies expire, depending on their level of income.
KFF’s analysis also reports that insurers in the individual market are expected to raise their premium rates by a median of 18%, which would be the highest increase since 2018. Wager also explained the rise in prices could make healthy people leave the market all together, leaving a vulnerable population that needs coverage with even higher costs.
Ashton Davidson is a Texan who is closely monitoring the situation. He has a unique medical story. In 2022, Davidson — who identifies as trans masculine — went under gender-affirming top surgery as part of his transition. During the surgery, doctors discovered he had breast cancer, Davidson said.
“That was a pretty huge, devastating blow,” Davidson said of his diagnosis.
He was on an insurance plan through his company, but was later laid off. Eventually, he found an insurance plan through the individual market that cost him $60 a month. Davidson said he has no sign of cancer currently in his body, but is regularly doing screenings and taking medication to prevent a relapse.
His insurance plan helps him cover the necessary doctor’s appointments. He said he qualifies for healthcare subsidies, which greatly reduces his monthly cost. Davidson said without the subsidy he would have to pay $600 a month. The possibility of losing that financial help is weighing on him.
“It means that I’m going to have to probably choose a different plan that doesn’t probably have the coverage that I need, and may result in a lot of out-of-pocket costs that are unpredictable. So, mentally and emotionally, it’s really stressful,” Davidson explained.
What are politicians saying
Currently, politicians on both sides of the aisle are pointing fingers at each other to place the full blame of the looming government shutdown.
Rep. Greg Casar, D-Texas, said he and his Democratic colleagues are working to find a deal that will extend the tax credits.
“We are here to say, ‘We’ll keep the government open and fund your healthcare,’ while Republicans have just entirely skipped town and are scattered across the world on vacation,” Casar said.
But Republicans are firing back against that claim and say it is not the time and place to debate policy when the government is facing a shutdown. There is a proposal to pass a continuing resolution bill that will keep government employees paid through late November that already passed the House of Representatives.
Speaker of the House Mike Johnson, R-Louisiana, said Congress can debate the healthcare subsidies at a later date in the year. “Policy debates can happen separately, and Democrats don’t need to shut down the government to do it,” Johnson said in a statement.
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