Families fear for health care costs if Obamacare subsidies expire

For the past few weeks, Shana Verstegen has had a “stomach ache” and wonders what might happen to her family’s health insurance next year.

Ms. Verstegen and her husband both work for a small company as fitness trainers, which means they have to pay for their own plan.

Wisconsin parents of two saved about $800 (£601) a month on their health insurance thanks to the Affordable Care Act, also known as Obamacare, and premium tax credits.

Scheduled to expire at the end of the year, federal subsidies are now at the heart of the battle over the US shutdown. Democrats won’t support a spending deal that would reopen the government unless Republicans renew the subsidies.

Ms. Verstegen and others are watching with concern, wondering what sort of financial consequences they would face if a deal couldn’t be reached.

“Everything is getting more and more expensive now anyway, and this would be another blow to our family,” she said.

Health policy experts say time is running out to prevent millions of people from losing their health insurance because rising prices will make it unaffordable.

The tax credits were first introduced by former President Barack Obama’s Affordable Care Act (ACA) in 2014 and then expanded during the Covid pandemic.

Some Americans could see their monthly insurance cost — also called premium — increase by several hundred dollars on Nov. 1, said Leighton Ku, a health policy professor at the George Washington Milken Institute School of Public Health.

“If you’re one of the 20 million or so people buying health insurance on the marketplace, if you’re about to see prices double on average, that’s a big deal,” he said. “It will soon be too late.”

Of the approximately 24 million people who obtain their health insurance through the ACA Marketplace, a large majority benefit from premium subsidies.

Stacy Cox, a photographer in Utah, has saved more than $10,000 a year on average since she started receiving the grants in 2022.

“It’s an absolute lifesaver for a lot of us,” said Ms Cox, who has an autoimmune disease.

But if the tax credits are not extended, Ms. Cox said she will have to quit her new photography business and find another job that offers health insurance.

About seven million people like Ms. Cox would have to stop buying health insurance on the marketplace if the tax credits end, Ku said. Of those, about four to five million are expected to lose their health care coverage completely because they won’t be able to find other ways, the data shows.

Many of those who will be affected are working-class people who do not qualify for Medicaid, the government program that provides health insurance to low-income adults, children, pregnant women, seniors and people with disabilities.

Hardest hit could be those in the ten US states – most of which vote Republican – that have chosen not to expand Medicaid eligibility.

“One of the political paradoxes of all this is that the places that are most affected are the most conservative states,” Ku said.

If the subsidies expire and healthier people start dropping out of insurance, that will also raise premium prices overall for Americans, because a pool of sicker customers will drive up health care costs, said Elizabeth Fowler, a distinguished researcher at the Johns Hopkins Bloomberg School of Public Health.

“You start to enter a death spiral where premiums become even more expensive and out of reach for more people,” she said.

Some Republican leaders in Congress have said they will discuss the future of the subsidies once the government reopens.

But at least some Republicans want their party to act now.

Rep. Marjorie Taylor Greene, a close ally of President Donald Trump, said she supports the tax credits, adding that her own children’s contributions would increase if they ended.

“I am absolutely disgusted that health insurance premiums will double if the tax credits expire this year,” the Georgia lawmaker said.

Republican Sen. Lisa Murkowski introduced a bill this month to extend the appropriations for two years, while Sens. Dan Sullivan and Tommy Tuberville are also in favor.

Trump has appeared open to negotiating with Democrats over their health care package, saying last Monday that if it was “the right deal, I would make a deal.” But he appeared to walk back those remarks later.

Experts said Republicans’ opposition to the subsidies is representative of their general dislike of the ACA, also known as Obamacare.

“Part of it is the belief that this is a big intrusion by the government, and that’s why they’re mad at it,” Ku said.

In addition to the expiration of tax credits, Republicans were also able to target the ACA this year thanks to Trump’s tax and spending bill, which resulted in deep cuts to Medicaid, changes that Democrats are also seeking to reverse.

Republicans say the cuts are intended to eliminate waste, fraud and abuse of federal funding.

Deeper Medicaid cuts aren’t expected to take effect for years, but Democrats who want health care premiums to stay at current levels must battle a looming deadline: the Nov. 1 open enrollment period.

Some Republicans have argued that the subsidies could be resolved later since they don’t expire until the end of the year, but Ku said some health insurers have already changed their rates in response to the expiration and may not be able to change them.

If the subsidies are not renewed before November, people will make their insurance decisions assuming their premiums will double, even if the credits are renewed later.

“The mechanics for fixing this this late in the game are complicated,” Ku said.

Verstegen said if her rates increase, her family will have to make financial sacrifices. Her family already has a $14,000 deductible and is still paying for a major hip operation two years ago.

“I truly believe that if this goes away next year, a lot of people will be very unhappy, and that will show in the election,” she said.

Health care affordability was not a major issue in 2024 or other recent elections because Americans have become accustomed to accessing health insurance through the ACA.

But if people start seeing their insurance prices rise, especially in red neighborhoods, that could prove a political liability for the Republican Party, Ku said.

“If I were a representative from Texas or Georgia, I would have doubts,” he said. “But in a game of chicken, you should never show your doubts.”