ACA marketplace shoppers experience ‘sticker shock’

Congress’ failure to approve extending enhanced tax subsidies is one factor driving higher premiums in the Affordable Care Act marketplace for 2026.

Open enrollment for the ACA marketplaces begins Nov. 1 for coverage that starts in January, although some states already have allowed consumers to “window shop” online for plans.

Louise Norris, a health policy analyst with healthinsurance.org and medicareresources.org, told InsuranceNewsNet that ACA marketplace shoppers in several states are already getting a preview of what’s to come if Congress allows the enhanced tax credits to expire Dec. 31 — and the early numbers are shocking some consumers.

KFF reported that ACA marketplace premiums would more than double next year if enhanced premium tax credits expire. Enhanced premium tax credits were introduced in 2021 and later extended through the end of 2025 by the Inflation Reduction Act. The enhanced tax credits both increased the amount of financial assistance already eligible ACA Marketplace enrollees received as well as made middle-income enrollees with income above 400% of federal poverty guidelines newly eligible for premium tax credits.

Norris provided some examples.

A 63-year-old making $63,000 a year and enrolled in the lowest-cost plan in:

• Atlanta, Ga., is spending $202/month this year; next year, without the enhanced subsidy: $1,201/month.
• Virginia Beach is spending $265/month this year; next year, without the enhanced subsidy: $801/month.
• Boise, Idaho, is spending $135/month this year; next year, without the enhanced subsidy: $764/month.

“We’re seeing significantly higher premiums across the board,” she said. “We are seeing the biggest increase since 2018.”

And the increases are hitting all ACA enrollees, whether they qualify for subsidies or not, she said.

“There are about 1.6 million marketplace enrollees this year who pay full price already because their income is high enough that they don't qualify for a subsidy,” she said. “Those folks will also be looking at pretty significant increases, just because the underlying full price cost of health insurance is going up significantly next year.”

Congress is out of session and the federal government is under a shutdown with no end in sight. Extending the enhanced ACA subsidies is one issue that Congress has failed to address while Democrats and Republicans remain at a stalemate.

“There is some talk in Congress about a potential compromise solution where Congress wouldn’t extend the enhanced subsidies now but might do some sort of partial extension,” Norris said. “So we really don't know what that will look like, until if and when they settle on something. It could be anywhere from no solution at all, meaning the enhanced subsidies just expire and things go back to the way they were before 2021, all the way to a full extension of what we have now, or something in between. So a lot remains to be seen there.”

Uncertainty impacting health insurers

The uncertainty over continuing the enhanced subsidies is leading to additional issue impacting health insurers’ ACA rate-setting for next year.

“Carriers know that when coverage becomes less affordable, the people who drop their coverage are the people who are healthy,” Norris said. “If a person is chronically ill or sick or dealing with significant health conditions, they just can't afford to drop their coverage. So the insurance companies knew that, as they filed premiums for this year, there were several million people expected to drop their coverage, and they would be the healthier people, so that results in a smaller, sicker risk pool that drives premiums higher.”

Increasing medical costs – particularly the cost of GLP-1 drugs – also are driving health insurance premiums higher, Norris said.

“But certainly, the lack of the congressional approval for enhanced subsidies is a factor this year that we haven't seen in past years,” she said.

Insurers leaving ACA market

Over the years, there has been quite a bit of fluctuation with insurer participation in various areas, with some insurers exiting certain markets and others entering, healthinsurance.org reported. In May, CVS Health Corporation announced that its subsidiary, Aetna, will no longer offer marketplace coverage after the end of 2025. Aetna offers Marketplace plans in 17 states in 2025, covering about 1 million enrollees.

In addition to Aetna’s exit, the following insurers are leaving the individual market and/or marketplace at the end of 2025 in the following states:

• Illinois: Health Alliance and Quartz
• Kentucky: CareSource
• Michigan: Molina and UM Health Plan/Michigan Care
• Mississippi: Primewell Health Services
• North Carolina: Celtic/Wellcare
• Ohio: AultCare
• Wisconsin: Molina and Chorus Community Health Plan
• Wyoming: Mountain Health CO-OP

In addition to the full market exits described above, Blue Cross Blue Shield of Arizona is terminating Marketplace PPOs at the end of 2025. BCBSAZ will continue to offer HMOs, but PPO enrollees will need to select new plans.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].