Pennsylvania’s Health Insurance Dilemma

Last month in Pennsylvania, for every individual who signed up for Obamacare, two opted out, likely due to concerns over rising costs. The average cost of health insurance through Penny, the state’s Affordable Care Act marketplace, is projected to double by 2026. If Congress allows a key financial incentive program to lapse at the end of this year, some might face price hikes several times higher than what they currently pay.

Penny leaders believe that the anticipated increase in costs is negatively impacting a program that has been successful in reducing uninsured rates. Currently, around 31,000 individuals have canceled their Penny health plan this open enrollment period, which began in November and will continue until the end of January. So far, about 16,000 people have registered.

Back in the spring, Penny managers estimated that roughly 150,000 of the 500,000 people who purchased plans in 2025 would drop out when faced with the 2026 options, which many might find unaffordable.

While it’s normal for some participants to leave due to job changes or eligibility for other programs like Medicare, the current surge in cancellations has surpassed previous market trends from 2025, indicating that cost remains a crucial factor in health care decisions. “People want health insurance, and if it’s affordable, they’ll get it,” noted Penny Executive Director Devon Trolley.

This fall’s prolonged federal government shutdown highlighted partisan tensions surrounding the enhancement of the insurance premium tax credit. This subsidy was designed to ensure that individuals wouldn’t have to spend more than 8.5% of their income on health coverage—a key aspect of the Affordable Care Act, championed by Democrats during Obama’s presidency.

The federal budget, recently approved by the Republican-controlled Congress, doesn’t include extensions for these tax credits, leaving it uncertain whether any proposed amendments by Democrats or Republicans will pass. U.S. Representative Brian Fitzpatrick, a Republican from Bucks County, is suggesting a two-year extension on the tax credit, albeit with certain limitations.

This subsidy could greatly assist working individuals and families who earn too much to qualify for existing Obamacare tax credits but still find insurance unaffordable. The original income-based tax credits for those under 400% of the federal poverty level won’t be expiring.

Since 2021, the additional tax credit has received yearly congressional approval, meaning most of those acquiring insurance through Penny will qualify for at least some financial aid. If Congress updates the tax credit by year-end, Penny intends to adjust the tax rates accordingly.

Market leaders are encouraging individuals to explore all insurance options—balancing low premiums against potentially high deductibles, or opting for higher monthly costs with lower out-of-pocket expenses—rather than canceling their plans outright. Trolley emphasized the importance of understanding the varying costs based on age, income, and location.

In the Philadelphia suburbs, costs are expected to rise between 40% to 70%, while in central Pennsylvania’s rural regions, an average increase of over 400% is anticipated.

Increased Outreach Efforts Amid Uncertainty

Amidst the looming increase in costs, state-based marketplaces and their partners are boosting marketing and outreach to inform people of upcoming changes. The Pennsylvania Health Access Network has increased its communications with former customers, sending reminders about registration deadlines and encouraging them to review their plans online.

Antoinette Kraus, the executive director of the nonprofit, observed that more individuals are reaching out sooner this enrollment season for information. “We’re seeing fewer people saying, ‘Let’s sign up today,’” Kraus said. “They’re pausing to ensure their choice fits their budget.”

New Jersey has also announced plans to enhance outreach for its Get Covered New Jersey marketplace, with events planned in malls and grocery stores across the state. Registration data for New Jersey’s 2026 plans hasn’t yet been made available.

Commissioner Justin Zimmerman from the New Jersey Department of Banking and Insurance urged people not to delay their enrollment despite uncertainties regarding tax credits. In New Jersey, registration must be completed by December 31st for coverage starting on January 1st.

“It’s crucial for consumers to shop and compare plans to find the best fit for them,” Zimmerman said in announcing these outreach efforts.

Budgeting for Health Insurance

Those accustomed to automatic plan renewals might be taken aback by the new price changes when their insurance companies send January bills around mid-December. In Pennsylvania, January-starting policies will expire on December 15, but changes can be made until the end of January.

This means individuals automatically re-enrolled still have time to switch plans if they find their first bill daunting and seek more affordable options. Additionally, those who cancel early in the enrollment period retain the option to sign up again later.

Anyone can still cancel their plan at the enrollment period’s end on February 1st, but they won’t be able to select a new plan until the following fall. Marketplace enrollment specialists assist individuals in evaluating the costs of various options. Yet Trolley remains concerned that, without an extension for the additional tax credit, many may struggle to find affordable plans.

“We’re striving to provide the best information,” Trolley remarked, “but ultimately, we can’t fill the gap created by the lack of federal funding.”