Subsidies that have lowered health insurance costs for millions of people during the pandemic are set to expire on December 31, 2025.
If they do, those who buy coverage through the federal and state health insurance marketplaces could see their monthly premiums jump to $2,050 per month (or $24,604 per year) in some cases, research firm KFF said..
Protecting subsidies has become a hot-button issue for consumers as they grapple with rising medical costs and other issues.
The expiring subsidies are at the center of a bitter battle in Congress, with Democrats seeking to preserve enhanced subsidies and Republicans seeking to eliminate them.
Four House Republicans who face tough battles in the 2026 midterm elections on Wednesday sided with Democrats to force a vote on the Affordable Care Act, also known as Obamacare, instead of discussing an alternative health care proposal submitted by House Speaker Mike Johnson that would not provide subsidies.
Protecting subsidies has become a flashpoint for consumers as they grapple with rising costs outside of health care. If the enhanced premium tax credit expires, individuals earning the median wage in the U.S. (about $63,000) will lose Obamacare subsidies (Getty Images)
Why subsidies are important
Similar to employer-sponsored plans, marketplace plans require a monthly premium in exchange for coverage. These plans are designed for individuals who don’t have access to health care through their employer, making them ideal for freelancers and contract workers.
Many people with Marketplace insurance qualify for premium tax credits, which lower their monthly insurance premiums.
Credit hours depend on factors such as income and family size. For example, the monthly premium for a marketplace plan might be $1,000, but the tax credit can lower that cost to $500.
Medical research firm KFF said that in 2021, with the epidemic still raging and economic uncertainty looming, the Biden administration has enhanced the premium tax credit in two ways:
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Increase the amount of credit already available to those who have received it;
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Makes eligible people whose income exceeds 400% of the federal poverty level of $15,650, namely those making around $62,600.
As a result, some Obamacare enrollees received lower premiums, while others who were previously excluded from the tax credit became eligible for coverage. KFF noted that market enrollment has more than doubled due to enhanced tax credits.
House Speaker Mike Johnson, filmed on Wednesday, saw some in his party aligning with Democrats on the issue of health care subsidies (Reuters)
Research firm Urban Institute said these enhanced credits were on the verge of sunset and their demise would mean higher premiums for many people and an estimated 7.3 million people would lose all subsidies.
The institute estimates that the changes will leave 4.8 million people uninsured. Researchers found that marketplace enrollment could decline by more than 50% in eight states: Georgia, Louisiana, Mississippi, Oregon, South Carolina, Tennessee, Texas and West Virginia.
So how much more can you pay?
KFF said that if Congress does not expand the enhanced premium tax credit, consumers of all income levels will be affected, but those with incomes above 400% of the federal poverty level will be hurt the most.
For example, for someone making as little as $18,000 a year, health insurance premiums would increase by $378 per year. Those making $45,000 would see costs increase by $1,836 per year.
Individuals without children who earn about the U.S. median annual wage ($63,128) or more would lose the enhanced premium tax credit because their income is more than 400 percent above the poverty line.
A 45-year-old couple without children earning a combined annual income of $85,000 would pay $561 more per month, or $6,753 per year, if they lost the enhanced premium tax credit.
Older couples fare worse. For example, a 60-year-old couple without children earning $85,000 would see their monthly premiums increase by $2,050, or $24,604 annually, according to KFF.