Open Enrollment and ACA Tax Credit Expiration
Open enrollment kicked off this week for millions of Americans, but many are facing premium hikes exceeding $1,000 as the tax credits under the Affordable Care Act (ACA) are set to expire soon.
The ACA credits were introduced in 2021 and given an extension through 2025 by the Inflation Control Act.
According to a report from the Department of Health and Human Services, Nebraska has seen a jump in marketplace plan enrollment, rising from just over 74,000 in 2015 to over 136,000 in 2025.
Chiquita Brooks-LaSure, who previously directed the Centers for Medicare and Medicaid under the Biden administration, highlighted at a press conference that, prior to these changes, the U.S. uninsured rate was at a record low.
“It’s actually worse than many expected, with early estimates suggesting premiums could rise by 26%,” Brooks-LaSure noted. “Many are experiencing premium increases by hundreds or even thousands of dollars.”
She emphasized that the ACA aims to make healthcare access and costs manageable, but the expiration of these credits would diminish that goal.
For instance, Brooks-LaSure pointed out that a 60-year-old couple in Nebraska with an income of about $83,000 could see their premiums soar by over $22,000 annually. Similarly, a family of four earning $64,000 might face an increase of around $2,600.
A forecast by the Congressional Budget Office indicated that permanently extending the ACA tax credits could increase the federal deficit by $350 billion by 2035.
Omaha State Senator John Fredrickson remarked that the healthcare system depends on these subsidies, warning that their withdrawal could compel private insurers to raise their rates.
“What we’re confronting is genuinely concerning,” Fredrickson said. “This choice being made raises serious questions about whether we should be neglecting healthcare affordability for the general population. I think there’s a strong argument for saying no, particularly if it’s funded to provide tax breaks for some of the wealthiest Americans.”
The upcoming legislative session starts on January 7 and will prioritize budget discussions. However, Fredrickson stressed that addressing the changes in federal law is crucial.
If these ACA credits aren’t renewed, about 30,000 Nebraskans could lose Medicaid and another 15,000 would lose health insurance, according to Kelsey Allens, a healthcare access attorney at Nebraska Appleseed. She mentioned that 93% of enrollees depend on these enhanced subsidies.
“There has been some talk among Nebraska’s Congressional delegation about high-income individuals benefiting from subsidies,” Ahrens said. “But it’s essential to clarify that once the enhanced insurance premium tax credit expires, it’s the lowest-income Nebraskans who will suffer the most.”
One affected individual is Audrey Horne, who, along with her husband in Omaha, has relied on the ACA since 2019 because her husband’s job doesn’t include health insurance. They’ve seen their premiums jump by $688 a month.
“So far this year, we’ve incurred about $10,000 in medical expenses after factoring in out-of-pocket costs for prescriptions and other necessities, even though we have insurance,” Horne noted. “Clearly, we’re not benefiting from some sort of free ride; we get a bit of assistance with insurance costs.”
Brooks-LaSure, Frederickson, and others on the call urged Nebraskans to reach out to their congressional representatives for change. Brooks-LaSure remarked that cuts are not a foregone conclusion, highlighting Congress’s ability to maintain the tax credits and safeguard Medicaid.
“No one should have to give up health insurance due to high costs. No small business should face a financial strain from escalating premiums, and no individual should have to travel great distances for treatment because a rural hospital has shut down,” Brooks-LaSure added.
Nebraska Congressman Don Bacon, part of a bipartisan group, stated principles aimed at extending and reforming the ACA credits, including a proposed two-year extension and income limits.
Senate Majority Leader John Thune indicated to Politico that achieving an extension would necessitate all 60 votes in the Senate.
“I feel as if this whole shutdown is a direct attack on me—on people like me,” Horne expressed.
