Dem: Out-of-pocket health costs could rise

The claim: House Democratic Whip Katherine Clark, D-Mass., the second-highest ranking House Democrat, said in a Sept. 12 X post, "Republicans are spiking health insurance premiums by 75% for everyday Americans" if they don't extend the enhanced Affordable Care Act subsidies.

Sen. Chris Murphy, D-Conn., used the same figure Sept. 9. And AHIP, an insurance industry group, also cited the 75% figure in an article in which it urged passage of subsidy extensions.

PolitiFact ruling: If the Republican-controlled Congress does not extend Affordable Care Act enhanced subsidies before they expire at the end of this year, enrollees would have to pay more.

KFF analysis of federal data found that the average increase in out-of-pocket coverage cost would be 79%, with state-by-state average increases ranging from 49% to 195%.

This cost increase would come from a combination of insurance premium increases and the disappearance of subsidies, rather than from "spiking health insurance premiums" alone. The statement is accurate but needs clarification.

Discussion

With federal government funding set to run out Oct. 1 unless Congress passes an extension, Democrats are seeking to leverage government shutdown fears to persuade Republicans to extend Affordable Care Act subsidies that would otherwise expire at the end of the year.

Most Republicans want to pass a "clean" resolution to extend the federal spending deadline; this type of bill would keep the government running at current spending levels and allow added time for more debate about proposed federal spending changes. Some Republicans also oppose the ACA subsidies as too expensive for taxpayers and say they were intended as a pandemic-era policy that has outlived its purpose. Some Republican lawmakers, though, agree that the subsidies should be extended and have worked on crafting legislation to do that.

Democrats, who are relatively powerless as the congressional minority, see the moment as an opportunity to attach a key legislative priority -- ACA subsidy extension -- to must-pass legislation. Democratic lawmakers say the expiration of enhanced subsidies for people who obtain health insurance through Affordable Care Act marketplaces would stick millions of Americans with additional costs.

Clark's office did not respond to an inquiry.

The 75% cost increase figure has been cited by KFF, a health care think tank. But it needs more context.

People who use the Affordable Care Act's marketplaces can buy health insurance from providers at various levels of coverage and varying premium costs. Most purchasers obtain subsidies, as long as they meet the income guidelines.

In 2021, then-President Joe Biden signed legislation that made Affordable Care Act subsidies more generous, by reducing the maximum amount purchasers would have to pay for premiums and enabling households whose incomes were higher than 400% of the federal poverty level to receive subsidies. Previously, the subsidies were capped at 400% of the poverty limit for a household, which in 2024 was $60,240.

Congress renewed these enhanced subsidies in 2022 through the end of 2025, so they are now poised to expire.

The subsidies proved popular; the number of people receiving them increased from 12 million in 2020 to 21.4 million in 2024, according to KFF's analysis of federal data. About three-quarters of those receiving subsidies in 2024 were households with incomes at 250% or less of the federal poverty level, or about $37,650.

Using 2024 federal data, KFF calculated the average annual premiums for enrollees who received enhanced subsidies. The government paid $5,727 of the total premium under the original Affordable Care Act subsidy rules. Another $888 came from the beneficiary's pocket.

The enhanced subsidy provision covered the final portion, $705. If the enhanced subsidy disappeared and the enrollee had to pay both the $888 and the $705 amounts, that would total $1,593. That's about 79% more than the same person was paying with the enhanced subsidies in place -- which is close to the 75% figure that Clark and Murphy cited.

The Congressional Budget Office, Congress' nonpartisan number-crunching arm, has projected that a failure to extend the subsidies would increase the uninsured population by 2.2 million in the first year and by an average of 3.8 million each year from 2026 to 2034.

CBO also projected that if the enhanced subsidies were to expire, premiums would increase by 4.3% in the first year, because of a decline in the number of people who get coverage, leaving fewer enrollees to pick up the costs. Premiums would increase by an annual average of 7.9% from 2026 to 2034.

There are nuances to note.

Enrollees wouldn't see a 75% increase in "premiums," as Clark phrased it. Their increase would stem from a combination of premium increases and reduced subsidies. However, for consumers, that distinction would matter little; by KFF's calculations, they would still be paying 79% more out of pocket, regardless of the reason.

The 79% figure is an average increase; the figure varies by state. Enrollees in Hawaii would have the lowest increase, 49%, while those in Wyoming would have the highest, 195%. There is also substantial variation based on the number of people in a family and their ages.

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