Millions at Risk of Higher ACA Premiums and Reduced Subsidies: What You Need to Know

This coming year, 24 million people using Affordable Care Act (ACA) health plans are facing tough times. Experts predict they will see steep premium hikes of over 15% and reduced federal subsidies, known as Obamacare. This could make it even harder for many to afford coverage.

Insurers cite rising medical costs and policy changes from the Trump administration as reasons for the increases. They’re particularly concerned about whether Congress will extend enhanced ACA subsidies that were put in place during the pandemic. If these subsidies expire, many consumers may find it impossible to pay their premiums.

JoAnn Volk, co-director of the Center on Health Insurance Reforms at Georgetown University, warns that without assistance, many will likely go uninsured. This situation is causing political stir-ups as lawmakers search for ways to prevent drastic cuts to health care subsidies.

According to a recent analysis from KFF Health System Tracker, insurers are proposing a median increase of 15% for 2026. This figure is notably higher than last year’s median of 7%. Chris Bond from AHIP, the health insurance industry association, emphasizes that companies are trying to shield consumers from these rising costs but need legislative help to extend tax credits that keep healthcare affordable.

The subsidies from the American Rescue Plan Act allow families with varying incomes to receive assistance. However, without an extension, many will find themselves paying far more out-of-pocket. Experts estimate that premium costs could rise by an average of over 75% for ACA enrollees.

For instance, insurers in Maryland are seeking increases between 8.1% and 18.7%. Meanwhile, New York shows a drastic variation, with one carrier proposing virtually no increase and another asking for 66%. These numbers underscore how average premium increases can differ significantly across states.

Health care expert Josh Schultz predicts significant “sticker shock” for consumers, as many will see dramatic increases in what they pay. If the trend continues, some may choose to drop their coverage entirely or switch to cheaper plans with higher deductibles.

Recent discussions in Congress suggest there’s still a glimmer of hope for maintaining some level of subsidy assistance. Some lawmakers are considering proposals that would slightly extend coverage to more families, potentially easing the financial burden on millions. However, these discussions come with mixed opinions; some argue that these subsidies can lead to fraudulent claims and misuse.

The upcoming open enrollment period starting on Nov. 1 will reveal how these changes impact consumers and their options. Experts urge that this situation needs close monitoring, as the outcomes could shape the future of health insurance in the U.S.

For those interested in more details, the KFF Health News offers in-depth reporting on these critical issues.

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Affordable Care Act, Health Care