Concerns About Rising Health Insurance Costs
Sasha Kinney is feeling anxious about her ability to manage the $750 monthly cost for her Obamacare health insurance in 2026. Rather than risk a medical emergency without access to her regular doctor, she’s considering putting her insurance bill on her credit card.
The 42-year-old from Drexel Hill found that her premiums increased this year because Congress did not extend a federal program designed to cap health insurance costs at 8.5% of income.
As the primary caregiver for her mother, she earns enough from her freelance work with a nonprofit that she doesn’t qualify for Medicaid, which is aimed at helping low-income individuals.
While a private health insurance plan available through Pennsylvania’s Obamacare marketplace has always been a big expense, she has prioritized it for managing her chronic headaches and stress-related pain. Unfortunately, the expiration of a program late last year resulted in higher premiums, with Kinney now facing an extra $250 each month without any new tax credits.
“These increased costs will put you in debt,” she mentions. “But it’s probably still better than having no insurance at all.”
Congress has yet to come to an agreement on renewing the tax credits that have made health insurance accessible to record numbers of Americans. Recently, the U.S. House of Representatives passed a bill to extend the program for three years, but it remains uncertain if the Senate will take action.
On Thursday, President Donald Trump spoke about a new medical plan designed to regulate drug prices and send health subsidies straight to consumers in an effort to combat soaring healthcare costs. However, details on the initiative remain vague, as there hasn’t been any confirmation on which lawmakers are involved in new healthcare legislation.
Meanwhile, the clock is ticking for Obamacare enrollees to navigate a significant price hike that has doubled the average health insurance cost in Pennsylvania.
The deadline for selecting a plan for 2026 is January 31. After that, if the premiums seem too steep, individuals can cancel their coverage but will have to wait until the fall enrollment period to select a new plan.
In Pennsylvania, around 70,000 individuals who purchased Penny plans in 2025 decided to drop their coverage due to the rising costs. Devon Trolley, the executive director at Penny, noted that the dropout rate is unprecedented, with about 1,000 students leaving each day.
On a national scale, while about 800,000 fewer people are enrolled, more individuals are opting for Obamacare plans compared to last year, resulting in a 3.5% overall drop in enrollment.
As the enrollment period approaches its end, market leaders are encouraging people to seriously consider whether they can sustain an annual plan or explore alternative Penny plan options. They promise that prices will be adjusted quickly if Congress ultimately restores the enhanced tax credits.
“Right now, we’re advising families to make the best decision based on their current costs,” Trolley said. “We want to ensure that those already insured don’t remain in a plan they cannot afford.”
Congress Considers Tax Credit Extension
The extra tax credits set to expire at the end of 2025 were first introduced in 2021 and have been renewed every year since.
In Pennsylvania, federal incentive programs previously ensured that most enrollees qualified for some financial assistance, with total sign-ups peaking at 497,000 in 2025.
The issue of tax credits became a sticking point in federal budget discussions last fall, leading to a government shutdown after Republicans declined to include the credits without major restrictions.
Ultimately, a budget passed without the tax credits because key Senate Democrats, including Pennsylvania’s John Fetterman, united with Republicans to end the shutdown.
Recently, 17 House Republicans, including Pennsylvania representatives Brian Fitzpatrick, Robert Bresnahan, and Ryan McKenzie, joined Democrats in voting for a bill to restore the tax credits for three years. This bill now requires Senate approval and may need to return to the House for further amendments.
Despite the expiration of the incentive program being a significant challenge for the Obamacare market, Trolley is hopeful that individuals shouldn’t fully dismiss the possibility of finding affordable coverage.
The Affordable Care Act also introduced income-based tax credits for those earning below 400% of the federal poverty level, roughly around $60,000, and these remain part of the law without expiration.
“We’ve been trying to encourage people not to assume that prices are too high,” Trolley remarked.
Health Insurance Decisions
In certain areas of Pennsylvania, insurance premiums are projected to be three to four times higher than anticipated for 2025. In the collar counties of Philadelphia, increases appear more moderate, with average hikes ranging from 46% in Chester County to 70% in Delaware County.
Various factors influence these costs, including household size, age, and income levels. Generally healthy individuals may save money by opting for a plan with lower monthly premiums but a higher deductible (the amount they pay out-of-pocket before their insurance kicks in).
Back in Drexel Hill, Kinney assessed the costs of maintaining her current insurance and weighed the option of switching to a more affordable plan.
Although her current plan boasts a low deductible, she still faces hundreds of dollars in copays and additional out-of-pocket expenses.
She is concerned that transitioning to a plan with higher copays might lead her to skip essential appointments.
Having established a routine with her doctor and physical therapist, she’s hesitant about starting anew with different providers.
“I think it just becomes wasteful. You might lower your monthly costs, but with higher deductibles and copays, you could end up spending the same amount,” she reflects. “There’s really no way to save money.”
