The state of California is gearing up to inform Affordable Care Act marketplace enrollees about potential significant cost increases next year. This warning comes as Congress debates whether to extend subsidies that help individuals afford health insurance.
Health care analysts predict a rise in the nation’s uninsured population if federal lawmakers do not agree to renew covid-era tax credits, which were authorized in 2021 to supplement ACA subsidies. A recent KFF poll revealed that over three-quarters of adults, including 59% of Republicans, support extending the enhanced tax credits for individuals with low to moderate incomes.
The additional credits have played a vital role in lowering premiums, making ACA insurance more affordable for millions of Americans, and decreasing the nation’s uninsured rate. Without an extension, the average amount subsidized consumers pay for their ACA health plans is expected to more than double, affecting over 24 million marketplace enrollees nationwide.
President Donald Trump hinted at a potential health care deal, while Republican U.S. Rep. Marjorie Taylor Greene expressed support for extending the tax credits. However, the disagreement between Republican and Democratic leaders has led to a government shutdown, with Democrats pushing for a bill that includes an extension of the tax credits.
If the subsidies are not extended, enrollees in Covered California, the largest state-run health insurance marketplace, could see their premium costs increase by an average of 97%. This could lead to millions dropping their coverage, creating additional strain on the health care system.
While California has allocated funds to offset the loss of enhanced premium subsidies, it may not be enough to cover the $2.5 billion in financial aid that Covered California enrollees receive annually. This could result in difficult choices for individuals, such as cutting back on essentials or going uninsured.
As open enrollment for 2026 ACA health plans approaches, Covered California is holding off on sending formal letters to enrollees in the hopes of congressional action. However, if no extension is approved, enrollees may receive notices of substantial premium increases, potentially deterring many from maintaining their coverage.
The uncertainty surrounding the future of ACA subsidies highlights the importance of congressional action to ensure affordable health care for millions of Americans. It is a pivotal moment for the health care landscape, with the potential for significant implications on individuals’ financial stability and the overall health care system.
