Millions of Americans who buy health insurance through the Affordable Care Act (ACA), also known as “Obamacare,” stand to loose their premium subsidies, with less than three weeks to go until they expire at the end of 2025. And the result of that would be skyrocketing health care costs for 22 million marketplace users.
If Congress does not extend the enhanced premium tax credits, it will also trigger a so-called “subsidy cliff” or strict income maximum, that abruptly cuts off subsidies to households with incomes that are over 400% of the federal poverty level. That would raise the costs of those healthcare plans by an estimated 75%, according to KFF, a nonpartisan health policy research group.
Currently, 92% of Americans enrolled the ACA marketplace plan receive some type of enhanced subsidies. That’s 22 out of 24 million people. However, not all would be affected by the subsidy cliff.
Letting the credits expire could send insurance skyrocketing to such high levels that many Americans wouldn’t be able to afford their current plans, or worse, keep their healthcare at all. One estimate found average family premiums could triple from $1,200 to $3,553 a month if the credits expire.
Congress is set to vote on extending the subsidies in mid-December, but it’s unclear if the House will pass it as is, or tack on conditions.
The run-up to that deadline has created a crisis as Republicans, backed by President Donald Trump, have seemed to play Russian roulette with 22 million American taxpayers’ healthcare. (The credits were not extended in Trump’s so-called “Big Beautiful Bill.”) The dispute over the credits was at the heart of the recent federal government shutdown, with the upcoming vote being a condition for Senate Democrats to end the standoff.
The president has said he doesn’t want to extend the credits, and would instead give that money “directly to the people” so they can “purchase their own, much better, health care.” However, according to independent fact-checking publication PolitiFact, without a formal proposal, there’s no way to determine if “Trump’s social media musings” would actually work.
Some Republicans are pushing for Americans to rely more on health savings accounts, or HSAs, but these can’t typically be used to pay for the actual health insurance plans themselves. Other Republicans are floating the idea of temporarily extending the credits through the 2026 midterm elections, when many are up for reelection.
If Republicans and Democrats in Congress don’t strike a deal, many Americans can expect to pay a lot more for their current plans on the exchange, or end up paying the same for less coverage.