If your health insurance has suddenly doubled in price, you need to read this
The fight over health-care subsidies has been in the news for months, causing the longest government shutdown in history this fall and rearing its ugly head again this month. But while you’ve certainly heard about the hubbub in Washington, you likely have a lot of questions, which is understandable. This topic is very complicated and—let’s be honest—a total mess right now.
Let’s start with the basics: The Affordable Care Act (ACA), also referred to as Obamacare, was signed into law in 2010 but fully enacted in 2014. Its goal was to increase health-care coverage to millions of Americans, and to do that, it relied on a sliding income scale and health-care subsidies, or premium tax credits. In 2021, President Biden introduced additional subsidies through the Inflation Reduction Act to make it more affordable. Enrollment skyrocketed from 11 million to more than 24 million.
But those 2021 subsidies are set to expire at the end of the year, and as a result, approximately 92% of ACA participants—or 22 million people—will experience massive insurance hikes. We’re talking increases of 114% on average, which will cause many people to lose coverage simply because they can’t afford it. “When people lose health insurance, it can mean significant financial debt,” Sabrina Corlette, director for the Center for Health Insurance Reform at Georgetown University, told CBS News. “It also means that people are waiting to the last minute to get necessary care, often ending up in our emergency rooms.” Republicans have been mostly opposed to the ACA since its inception, and President Trump has said that he’d “rather not extend” health-care subsidies for those with ACA plans.
While Democrats had been digging their heels in and refusing to sign off on the budget unless the subsidies were extended, eight Senate Democrats eventually agreed to punt the issue to December. And now, there is a Dec. 19 deadline to get some sort of health-insurance plan passed before the House and Senate break for winter recess—and those subsidies expire on Dec. 31.
So how did we get here, and what could happen next? We scoured the web for the best articles and information on health-care subsidies and why they’re such a contentious issue. Read on for the easy-to-understand Reader’s Digest version of this complicated issue.
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The ACA massively expanded health care coverage
Before the ACA was signed into law in 2010, health insurance was inaccessible to millions of Americans because of sky-high premiums and the fact that many people were ineligible for coverage because of pre-existing conditions. At that time, 14% to 16% of Americans were uninsured. By 2023, a record low of 7.7% were uninsured. In addition to creating new paths for people to buy more affordable health insurance plans, the ACA expanded Medicaid.
Discovered on the Center on Budget and Policy Priorities
Proponents say the ACA’s benefits outweigh its challenges, while opponents complain about government overreach
The ACA isn’t perfect. Many people are still slapped with relatively high premiums and out-of-pocket costs. But generally speaking, those in favor of the ACA (primarily Democrats) see it as a way for the government to help millions of Americans afford medical care. Those opposed to the ACA (primarily Republicans) believe health care is a personal responsibility, not a government one, and have called the plan socialist and unconstitutional.
Discovered on The Atlantic and Britannica
A majority of Americans believe the government should ensure health-care coverage for all citizens
According to new data, 66% of Americans believe that the government should ensure that all people have health-care insurance, with 35% of that number in favor of a single national government program (e.g., universal health care) and 31% supporting a mix of government and private programs. But even within the 33% who say that the government is not responsible for health care, 26% believe it should still cover seniors and the poor via Medicare and Medicaid.
Discovered on Pew Research Center
Health-care subsidies are based on income
In the early days of the ACA, premiums ranged from zero percent to 9.6% of a person’s income. Subsidies made that more affordable for people opting for the second-lowest-cost “silver” plan—aka the “benchmark plan.” In 2021, the American Rescue Plan Act and Inflation Reduction Act lowered that percentage to a max of 8.5%, thanks to—you guessed it—the subsidies being fought over now. If Congress doesn’t extend the increased subsidies, the cost of premiums will go back up.
Discovered on the Committee for a Responsible Federal Budget
The ACA always planned to use subsidies to keep it running
The architects of the ACA knew that by making health insurance more comprehensive, it would, in turn, become more expensive. For this reason, government subsidies were always part of the plan to get more people insured. When healthy people don’t purchase health insurance, and others can’t afford to buy it, there’s not enough money for insurance companies to cover the cost of treating sick enrollees. But because subsidies have made it possible for more people to afford health insurance—including young, healthy people—companies have more money to cover the costs of sick people.
Discovered on The New York Times
The cost of health insurance will skyrocket if these subsidies expire
Even if the expanded ACA subsidies introduced in 2021 are not extended, the original ACA subsidies—which require paying a larger proportion of your income—will still exist for those who earn 400% of the federal poverty level (FPL) or less. In addition to the reduction of subsidies, health insurance premiums are also rising in cost, which means the cost of health insurance will significantly increase for many people, not just those under 400% of the FPL.
Here’s what this might look like:
- A single person making $32,000 (204% of FPL) will see their monthly premium increase from $58 to $180—an annual increase of $1,468.
- A family of four making $66,000 (205% of FPL) will see their monthly premium go from $121 to $373—an annual increase of about $3,025.
- A family of four making $130,000 (404% of FPL) will see their monthly marketplace premium rise from $921 to $1,992—an annual increase of around $12,900.
- A 60-year-old couple making $85,000 (401% of FPL) will see their monthly premiums jump from $602 to $2,647—an annual increase of roughly $24,500.
Discovered on the Center on Budget and Policy Priorities
It’s unclear what would replace the expanded ACA subsidies
The fight over extending ACA subsidies was at the center of the recent government shutdown. As a compromise, Democrats proposed continuing the expanded subsidies for another year or two. While Republicans oppose any extension of ACA subsidies, they have yet to put forward a viable alternative. Some Republican lawmakers have suggested giving federal flexible spending accounts to every eligible American, though that would do nothing to make premiums more affordable.
Discovered on the Associated Press
Extending ACA subsidies has bipartisan support outside of Congress
Congressional Republicans are staunchly against extending expanded ACA subsidies. But Republicans enrolled in ACA plans don’t feel the same way. According to a survey by health policy organization KFF, which was released on Dec. 4, more than 8 in 10 enrollees (84%)—including nearly all Democrats and about 7 in 10 Republicans—are in favor of Congress extending the subsidies.
Discovered on KFF
Southern states will be impacted the most if expanded ACA subsidies expire
The 10 states with the highest share of the population receiving ACA subsidies are Florida, Georgia, Texas, Mississippi, South Carolina, Alabama, Tennessee, North Carolina and Wyoming. They are all Republican states and went to Trump in the 2024 election.
Discovered on Fortune
Last-minute alternatives have been voted down, but another is on the table
A Senate Republican bill introduced in early December proposed giving people $1,500 for health savings accounts if they earned less than 700% of the federal poverty level. That money could not be applied to ACA premiums (where deductibles hover around $7,000, on average), and it would not have extended the subsidies. It failed 51-48, short of the 60 votes needed to pass. A Democrat-sponsored bill was also shot down.
This week, House Republicans have their own bill that, among other things, would expand the availability of “association health plans” that allow employers to band together to buy coverage, but again, it does not extend the subsidies.
Discovered on NPR and ABC News
Nearly a quarter of people currently on the ACA plan will likely opt out
In one recent poll, 25% of respondents said that they would likely go uninsured if the cost of their premium doubled, leaving them vulnerable to the exorbitantly high costs of medical care. In fact, even with the ACA, as many as 66.5% of people who file for bankruptcy blame medical bills as the primary cause.
Discovered on KFF and the National Library of Medicine
Early enrollments for 2026 are indeed down, according to new data
According to early enrollment data from five states, more people seem to be opting out of the ACA already. In Pennsylvania, for example, sign-ups for first-time ACA enrollees are currently 20% lower than they were at this time in the past two years, and 30,000 fewer people have signed up compared with last year.
Discovered on NBC News
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