The familiar partisan fight over the Affordable Care Act has returned — but this year it comes amid open enrollment and uncertainty about whether Congress will extend enhanced premium subsidies that have helped many consumers in recent years.
Lawmakers remain split, and the delay is creating real anxiety for people signing up for coverage and for the state-run marketplaces that must plan for multiple outcomes. About half of current enrollees who are registered to vote told a December KFF poll that a $1,000 rise in overall health costs — including premiums, copays and deductibles — would have a major effect on their vote or party choice in next year’s midterms.
Many consumers are waiting to see what happens before committing. “Before I sign up, I will wait and see what happens,” said Daniela Perez, a 34-year-old education consultant in Chicago. Perez said her plan could jump from about $180 a month this year to $1,200 next year without an extension of the tax credits. “I’m not super hopeful. Seems like everything is in gridlock.”
In December, as part of a deal to end a recent shutdown, the Senate held a Dec. 11 vote on a proposal to extend the subsidies. Republicans also advanced an alternative that included funding for health savings accounts (HSAs). Neither measure reached the 60 votes needed for passage. In the House, Speaker Mike Johnson planned a narrower package focused on measures he framed as addressing health care costs — including expanded association health plans, funding for cost-sharing reduction payments to stabilize the individual market, and stricter transparency rules for pharmacy benefit managers. That package, like the Senate Republican proposal, would not renew the pandemic-era enhanced subsidies.
Democrats largely favor continuing the more generous tax credits, which were expanded in response to the COVID pandemic and are set to expire at year-end. Republicans are divided: some oppose the cost and political implications of a straight extension, while others support continuing subsidies to avoid local political fallout in next year’s elections. The White House has signaled support for HSAs in principle but has not endorsed a specific congressional plan.
Shoppers face pressing deadlines. To have coverage begin Jan. 1, consumers needed to choose a plan by the Monday before that date, while most states keep open enrollment open through Jan. 15 for coverage starting Feb. 1. Marketplaces must also prepare contingency changes, which could take days or weeks to implement. “We have a plan on the shelf” to update websites and notify consumers, said Audrey Morse Gasteier, executive director of the Massachusetts Health Connector.
But time in Congress is limited. “In many ways, it feels like they are farther apart than they were even a few months ago,” said Jessica Altman, executive director of Covered California.
Early enrollment signals are mixed. The Centers for Medicare & Medicaid Services reported Dec. 5 that about 949,450 people who did not have ACA coverage this year had signed up in the first month of open enrollment across federal and state marketplaces — slightly below last year’s early tally of about 987,869 new enrollees. Returning customers who have already selected plans are up, roughly 4.8 million compared with 4.4 million at the same point last year.
Experts say the pattern — fewer newcomers but quicker reenrollment by some current enrollees — may reflect that sicker or more dependent consumers enroll earlier. “People who come back early in the enrollment period are those who need the coverage because they have a chronic condition or need something done,” said Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms. For the federal marketplace, final counts won’t be clear until people make their first premium payments.
Some state marketplaces have reported larger declines in new sign-ups. Pennsylvania’s Pennie reported a 16% drop in first-time enrollments in the first six weeks of open enrollment compared with last year, and also noted that for every new enrollment one existing customer canceled. Most of those canceling earned between 150% and 200% of the federal poverty level — about $23,475 to $31,300 for a single adult. California saw a 33% decline in new enrollments through Dec. 6.
Affordability is shaping choices. Covered California reports more shoppers choosing bronze plans, which carry lower monthly premiums but much higher deductibles. Nationally, the average bronze-plan deductible is set to be $7,476 next year, versus $5,304 for silver plans, according to KFF. “That people are being forced to opt for plans with really high deductibles is a warning sign,” Altman said.
Marketplaces are also seeing increased outreach. Massachusetts reported a 7% rise in consumer calls in the first month of enrollment, with call centers hearing “heartbreaking” stories from people unsure how they can remain covered, Gasteier said.
If the enhanced tax credits lapse, subsidies will revert to pre-pandemic rules. Under current law, households pay a specified percentage of income toward premiums and receive a tax credit to cover the rest, with payments typically going directly to insurers. The enhanced credits lowered or eliminated the contribution for lower-income enrollees and removed the upper income cap for eligibility; critics pointed to the lack of an upper-income cutoff.
Without the expanded subsidies, lower-income households would resume paying a minimum share of premium costs — about 2.1% of income for the lowest bracket — while higher earners would see required contributions climb to nearly 10%. People earning above roughly four times the federal poverty level (about $62,600 for an individual or $84,600 for a couple) would no longer qualify for subsidies.
That change could sharply raise costs for some shoppers. Debra Nweke, 64, who is retired and lives in Southern California with her 62-year-old husband, said their plan could rise from $1,000 a month this year to $2,400 next year if subsidies end. “How can you have health insurance that is more than your rent?” she said.
Senate Majority Leader John Thune said Republicans want to lower health costs but oppose subsidies that would extend to higher earners with “unlimited amounts of money,” and he objected to providing free coverage to those at the lowest income levels. Still, some Republicans back continuing subsidies to avoid electoral consequences.
Even people who currently receive help are feeling pressure. Andrew Schwarz, a 38-year-old pastor in Bowie, Texas, said his ACA premium will rise from $40 a month this year to $150 next year after he chose a plan with a lower deductible. Schwarz and his wife qualify for marketplace coverage while their children are covered by a state program due to low family income. “Our prices are going up, but even at that, I don’t have any other options,” he said. “Obamacare has worked out for my family. We’ll just have to take the additional cost out of somewhere else in the family budget.”
The outcome of the subsidy debate will shape enrollment, plan choices and political fallout heading into the midterms. For now, consumers, state marketplaces and policymakers are weighing trade-offs as the deadline for coverage approaches and as Congress continues to negotiate whether — and how — to extend the financial assistance that has made coverage affordable for millions.