ACA Health Insurance Premiums to Rise 75% as Pandemic Subsidies Expire

Health insurance premiums for those purchasing plans through the Affordable Care Act (ACA) marketplaces are projected to increase by an average of 75% in the upcoming year following the expiration of enhanced pandemic-era premium subsidies. These enhanced subsidies, introduced during the COVID-19 pandemic, significantly reduced premium costs and contributed to record-high enrollment of 24 million people, helping lower the uninsured rate to historic lows. Now, as these subsidies phase out, individuals who enjoyed lower rates are expected to face substantially higher premiums, with a typical premium rising from $60 to $105 monthly.

The end of these enhanced tax credits is anticipated to lead millions—estimated at 8.2 million by the Congressional Budget Office (CBO)—to lose coverage, especially among healthier individuals who may opt out due to cost increases. This shift would leave insurers with a higher-risk pool primarily composed of individuals requiring more extensive medical care, prompting insurers to raise premiums further in anticipation of increased claims costs.

The rising premiums and loss of subsidies are influenced by federal regulatory changes enacted in recent years, including policies from the Trump administration and legislative acts affecting the ACA marketplaces. While Congress has the ability to extend these subsidies, political opposition remains significant, with concerns about ongoing premium hikes and taxpayer costs driving resistance.

Notably, southern states such as Texas, Florida, and Georgia have seen substantial ACA marketplace enrollment growth due to expanded access afforded by the temporary subsidies. The expiration of these subsidies and increased premiums risk reversing these gains, potentially increasing the uninsured population in these regions.

Insurers’ rate filings and commentary underscore the central role federal policy plays in premium setting this cycle, shifting focus away from traditional cost drivers like drug prices and hospital expenses. Monitoring the interplay of regulatory actions, insurer behavior, and consumer decisions will be critical for stakeholders navigating the ACA insurance landscape in the coming years.