How Much Will You Pay for a Marketplace Health Plan Next Year? That’s Up to Congress.

A healthcare worker prepares a dose of the Covid-19 vaccine. (Johis Alarcon/Bloomberg)

Key Points

About This Summary

• Millions in marketplace plans may face higher health insurance costs due to expiring Covid-era tax credits.
• A bipartisan bill seeks to extend subsidies, but faces opposition from Republicans concerned about the cost.
• The subsidy extension could be a compromise to avert a government shutdown, but faces challenges in the Senate.

Lawmakers are looking for ways to stanch a funding cut expected to nearly double the cost of health insurance for the tens of millions of people enrolled in marketplace plans—and leave some 2.1 million of them without coverage at all.

The government-subsidized plans, launched in 2014 as part of President Barack Obama’s Affordable Care Act, were designed for people with moderate incomes who otherwise lack coverage. After a rough start marked by sign-up glitches, some 24 million Americans are currently enrolled in the plans. That’s double the number in 2021, thanks to Covid-era government subsidies in the form of enhanced tax credits.

But because Congress didn’t extend those credits as part of the Republican-led tax and spending bill that President Donald Trump signed into law this summer, enrollees are on track for massive sticker shock when they sign up for new 2026 plans starting in November.

“Millions of families will incur thousands of dollars in additional healthcare costs a year when they are barely making it right now,” House Democratic leader Hakeem Jeffries of New York said Thursday, in reference to those cuts as well as changes tightening Medicaid eligibility.

The double whammy of 18% higher premiums charged by insurers combined with the end of enhanced tax credits that dramatically lower the share that enrollees actually pay could increase typical monthly payments by 75%, according to a KFF analysis.

To keep that from happening, nearly 20 Congress members—including 12 Republicans—have signed onto a bipartisan bill introduced last week by Republican Jen Kiggans of Virginia and Democrat Tom Suozzi of New York seeking to extend the subsidies through next year.

It will be a tough sell with many Republican lawmakers who are both opposed to the program overall and concerned about its price tag. The Congressional Budget Office has estimated that extending the credits through 2034 would increase the federal deficit by $383 billion including interest, with a one-year extension costing $23 billion.

Fiscal hard liners such as Republican Rep. Chip Roy of Texas have already voiced their opposition to any extension. House Republicans “should not extend…$400 BILLION in Biden’s COVID-era expansion of Obamacare subsidies that are increasing the cost of healthcare. We should instead pass Healthcare Freedom to give people their doctor of choice at lower prices,” he wrote on X this week.

A compromise could help avert a partial government shutdown at the end of the month. If Republicans agree to fund the extension, they are more likely to win Democrats’ support on their spending bill. GOP leaders need at least some Democratic votes. There are currently 53 Republicans in the Senate. They’ll need 60 votes to avoid the shutdown.

Getting those votes looks tenuous. Senate Majority leader John Thune told Politico this week that he doesn’t want to tie the health plan subsidies to the stopgap budget measure funding the government through January.

Write to Anita Hamilton at anita.hamilton@barrons.com