ACA Premiums Soared This Year Without Tax Subsidies

As the end of the year approaches, millions of Americans are facing significant health care cost increases. The expiration of tax subsidies under the Affordable Care Act (ACA) on December 31, 2025, could lead to financial strain for many individuals. Experts predict that without the extension of these tax credits, individuals may see a dramatic rise in their health insurance premiums.

Impact of Expiring ACA Subsidies

Approximately 22 million Americans currently benefit from ACA subsidies designed to make health insurance more affordable. These subsidies were established in 2021 and have played a crucial role in keeping monthly premiums manageable for many households.

Projected Premium Increases for 2026

Recent analysis from investment adviser SmartAsset reveals the potential financial burden if the tax credits lapse. Here are some key findings:

• In Mississippi, participants could see their average monthly premiums rise from $41 to $605, marking a staggering 1,376% increase.
• West Virginia could experience similar spikes, where the average premium increase could reach 1,058%.
• Overall, the health policy group KFF estimates an average premium cost increase of 114% for the 22 million ACA enrollees dependent on these subsidies.

Status of ACA Tax Credits

The tax credits are currently set to expire, as Congress has not reached an agreement to extend them. While Democratic lawmakers advocate for an extension, they face significant opposition in the Republican-majority Congress. Recently, the House passed a healthcare bill that does not include the tax credit extension, and both chambers are not scheduled to reconvene until early next year.

Potential Consequences of Non-Extension

If Congress does not act, individuals could lose complete eligibility for the subsidies or receive significantly reduced amounts. The Congressional Budget Office forecasts that around 4 million people might opt to drop their health insurance altogether if costs escalate.

Additionally, experts warn that increased costs could affect everyone. Hospitals would likely raise prices to compensate for providing care to those without insurance. As Emma Wager, a senior policy analyst at KFF, pointed out, this creates a cycle where rising costs impact all patients.

In summary, the pending expiration of ACA tax subsidies poses a significant threat to health care affordability for millions of Americans. Without intervention from Congress, the resulting premium hikes could lead to widespread financial hardship and increased overall health care costs.