Millions of Americans who buy health insurance through the Affordable Care Act (ACA), also known as “Obamacare,” stand to loose their premium subsidies, with less than three weeks to go until they expire at the end of 2025. The result: skyrocketing health care costs for 22 million marketplace users.
If Congress does not extend the enhanced premium tax credits, it will also trigger a so-called “subsidy cliff” or strict income maximum, that abruptly cuts off subsidies to households with incomes are over 400% of the federal poverty level. That would raise the costs of those healthcare plans by an estimated 75%, according to KFF, a nonpartisan health policy research group.
92% of Americans enrolled the ACA marketplace plan currently receive some type of enhanced subsidies. (That’s 22 out of 24 million people). However, not all would be affected by the “subsidy cliff.”
Letting the credits expire will send insurance skyrocketing to such high levels, that many Americans wouldn’t be able to afford their current plans, or worse, keep their healthcare, at all. For example, one estimate found average family premiums could triple from $1,200 to $3,553 a month if the credits expire. (Who can afford that?)
Congress is set to vote on extending the subsidies in mid-December, but it’s unclear if the House will pass it, as is, or tack on conditions.
The run up to that deadline has created a crisis of the Republicans own making, backed by President Donald Trump, who are playing Russian roulette with 22 million American taxpayers’ healthcare. (They did not extend the credits in their so-called “Big Beautiful Bill.”)
The dispute over the credits was at the heart of the recent federal government shutdown, with the upcoming vote a condition for Senate Democrats to end the standoff.
The president has said he doesn’t want to extend the credits, and instead give that money “directly to the people” so they can “purchase their own, much better, health care.” However, without a formal proposal, there’s no way to determine if “Trump’s social media musings” would actually work, according to PolitiFact, an independent fact-checking publication.
Some Republicans are pushing for Americans to rely more on health savings accounts, or HSAs, but these can’t typically be used to pay for the actual health insurance plans, themselves. Other Republicans are floating the idea of temporarily extending the credits through the 2026 midterm elections, when many are up for reelection.
If Republicans and Democrats in Congress don’t strike a deal, expect to pay a lot more for your current plan on the exchange, or end up paying the same for less coverage.
