Challenges of Rising Health Insurance Premiums in Texas for Small Business Owners

San Antonio small business owners Mark and Laura Humphries have been relying on the Affordable Care Act marketplace for health coverage since 2014. They benefited from extended tax credits under the American Rescue Plan Act of 2021, keeping their monthly premiums affordable, around $500. However, the expiration of these enhanced credits has resulted in a significant hike, with premiums nearing $3,000. Laura Humphries, a graphic designer, expressed concern over their health insurance's affordability, noting that they might need financial assistance to manage the costs. The Humphries family is among those exploring alternative health coverage options due to rising premiums. In Bexar County, over 234,000 residents were covered by marketplace plans in 2024, including small business owners, part-time workers, and early retirees. Maria Lee, a health insurance broker in South Texas, highlighted that the loss of enhanced credits has particularly impacted individuals with chronic conditions and unexpected health issues. This transition poses challenges for clients requiring consistent medical attention. The majority of Americans under 65 receive insurance through employer-sponsored plans, whereas those over 65 are typically covered by Medicare, often supplemented by private insurance. The Affordable Care Act was designed to provide affordable insurance options through its marketplace. Premium tax credits, initially set to lapse in 2022, were extended during the COVID-19 pandemic, thereby reducing premiums for many. However, upon expiration, individuals with incomes above 400% of the federal poverty line faced significant premium increases. Mark Humphries managed to find different plans within the marketplace, yet these options tend to be less economical than their previous family plan. Laura Humphries and her children are currently on temporary private emergency plans while searching for a sustainable long-term solution. Health broker Lee noted that although available plans are plentiful, they often lack the comprehensive coverage akin to standard policies. Despite concerns about reduced marketplace participation due to premium surges, Texas has seen an increase in enrollments. Data from the Centers for Medicare and Medicaid Services indicates over 4.1 million Texans enrolled in marketplace plans by 2026. Charles Miller of the nonprofit think tank Texas 2036 stated that most ACA enrollees in Texas access low- or no-cost marketplace plans despite the phasing out of enhanced credits. Miller emphasized that a substantial portion of uninsured Texans is eligible for no-cost plans, with ongoing efforts to communicate these opportunities effectively. Bexar County continues to address the coverage gap, focusing on retaining access to affordable healthcare options for eligible residents, especially following the expiration of subsidies.