Enrollment for the Obamacare insurance option started on Saturday, and there are concerns that some Americans might face an increase in their monthly premiums if the tax credit is not renewed by the end of the year.
KFF, a health research nonprofit, predicts that individuals aged 60 and older with an income of $65,000 may pay $920 a month in 2026. Once the tax credit lapses, it’s expected that this cost could jump to $1,380 a month. If the tax credit is extended, the premium would drop significantly to $460.
This tax credit enables Americans in that income bracket to receive about $866 in assistance, which covers roughly 65% of what a silver plan costs.
The premiums vary based on several factors, including age, income, and location.
For older adults earning $65,000 in states like Montana, Texas, and New Mexico, premiums could be especially steep. In West Virginia, for example, some residents might face an increase of $1,544 per month if the tax credit is not available, contrasting sharply with the $460 they would pay with the subsidy.
Meanwhile, low-income individuals could lose their free insurance entirely. Those earning under $27,000 would end up paying around $66 a month if the subsidy fades.
A person making $35,000 would see their premiums rise by $132 compared to the $86 they would pay if the subsidy remains intact through 2026.
The battle over extending ACA tax credits is central to the ongoing government shutdown discussions. Extending the subsidy could cost the federal government about $23 billion in 2026 and around $350 billion over the next decade, as indicated by the Congressional Budget Office (CBO).
If Congress had acted to prolong these tax credits by September 30, premiums in 2026 would have been around 2.4% lower than previously estimated, according to CBO Director Philip Swagel.
Swagel noted in a memo that delaying action beyond the September deadline would likely reduce federal costs and lead to lower enrollment growth in 2026.
Democrats are aiming to negotiate the continuation of the tax credit next year, but Republicans have stated they won’t engage until a spending package is set up to fund the government.
However, it seems such discussions may come too late.
Jessica Altman, executive director of Covered California, expressed that if a comprehensive policy discussion regarding market affordability is planned, it shouldn’t happen for the 2026 coverage but should look ahead to 2027.
She also mentioned that delays in reforming the ACA tax credits could add more strain on both markets and consumers, leading to increased disruption.
According to the CBO, if the subsidies are allowed to end, nearly 4 million fewer individuals will have marketplace plans over the next decade.
