ACA health insurance will cost the average person 75% more next year, research shows

Health insurance premiums are going way up next year for people who buy their insurance on Healthcare.gov or the state-based marketplaces, according to an analysis out Friday.

The average person who buys Affordable Care Act insurance will be paying 75% more for their premium, according to the analysis from KFF, a nonpartisan health policy research group.

The insurers' narrative

Summer is when health insurance companies set their rates for the following January and then submit those rates to state regulators.

Then researchers at KFF pore over those documents to make sense of what health insurance costs are going to look like for consumers in the coming year.

"These filings are usually hundreds of pages filled with math and equations," explains one of those researchers, Cynthia Cox. "But sometimes they also add this narrative to explain why they're raising their premiums."

This year, instead of talking about rising drug costs or hospital charges, insurance companies were talking about federal policy, Cox says. "Pretty much every insurance company is talking about the expiration of enhanced premium tax credits in the ACA markets."

Those markets are where people go to buy Obamacare plans, which serve people who can't get health insurance through their jobs and who don't qualify for Medicaid or Medicare.

Pandemic-era help

The enhanced subsidies started during the COVID-19 pandemic under the Biden administration and helped dramatically decrease the cost of premiums for these plans. 

It turns out, people liked those lower premiums. "The number of people signing up for coverage has more than doubled," says Cox, who directs the Program on the Affordable Care Act at KFF. In January, enrollment hit a record 24 million. That high enrollment helped drive the uninsured rate to its lowest level ever.

Now that those subsidies are going away for next year, premiums are going to spike. For example, if someone paid $60 a month for their health insurance this year, they might be looking at $105 a month next year. 

People who are generally healthy might well decide that the higher premium is not worth it. They'll go without health insurance and risk it. The Congressional Budget Office estimates letting the subsidies expire would increase the number of uninsured by 4.2 million people.

If healthy people opt out, the insurance pool is left with those who cost insurance companies more — people who can't go without health insurance because of chronic conditions or expensive medications. "That's why insurance companies are going ahead and charging a higher premium, with the expectation that the market is going to get sicker next year," explains Cox.

Extension unlikely

Of course, Congress could extend the enhanced subsidies, but that would mean President Donald Trump and Republican lawmakers supporting the Affordable Care Act, which is unlikely. The Republican Study Committee's 2025 fiscal budget said the enhanced subsidies "only perpetuate a never-ending cycle of rising premiums and federal bailouts — with taxpayers forced to foot the bill." The chair of the Senate's HELP committee, Sen. Bill Cassidy, R-La., last year urged Congress to reject an extension, saying the subsidies "hide the unsustainable skyrocketing cost of Obamacare."

Cox of KFF points out that a big portion of the new people who got covered in the last few years live in Republican strongholds. "A lot of southern states like Texas and Florida and Georgia have seen a tremendous amount of growth in their ACA marketplaces," she says. That growth could be reversed if higher premiums price people out of coverage.

The Congressional Budget Office estimates that 8.2 million people who get ACA insurance now will become uninsured due to the expiration of the enhanced tax credits along with other changes the Trump administration and Congress have made to the marketplaces through regulations and the One Big Beautiful Bill Act.
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