Missourians brace for health insurance premium spikes with federal subsidies set to expire

The U.S. Senate will vote in December on a bill to extend subsidies for federal marketplace plans, but the fate of the bill is uncertain

BY: RUDI KELLER and Steph Quinn

Missouri Independent

Until last year, Roberta Ross-Fisher had never been in a hospital except to visit friends and family.

The self-employed higher education consultant from Franklin County was so diligent about cleaning her teeth she had a gum graft several years ago to repair where she overbrushed.

Then, on May 5, 2024, she received a phone call. She had cancer in her lower jaw.

She took time off work and underwent surgery to remove the cancer and reconstruct her mandible with bone from her fibula. Now in remission, she gets CT scans and sees her oncologist every few months.

"That's non-negotiable, whether I have insurance or whether I don't," Ross-Fisher said.

What is also non-negotiable is the premium she'll pay to remain in a health insurance plan she purchases through the federal marketplace. This year, it's $295 per month. Next year, if Congress extends current subsidies, it will be $479.

And if the subsidies go away Jan. 1, the price will be $1,216 per month, a 312% increase.

It is enough to give her pause, despite needing cancer follow-up care. Ross-Fisher in 2026 will qualify for Medicare, the federal insurance program for older and disabled adults.

"I've been having conversations with my husband," she said. "What do I do? I'm now a cancer patient. Do I risk going for six months without insurance?"

The conversation Ross-Fisher is having with her husband is the same one being held in thousands of households across Missouri.

The open enrollment period for Affordable Care Act plans opened Nov. 1 and ends Jan. 16. For some, the extra costs for 2026 will mean they go without coverage.

Others may look for alternatives, such as Missouri Farm Bureau health coverage that does not qualify as an insurance plan under federal definitions. Backers promised it would be cheaper when lawmakers passed the law this year, but no one interested in buying into the plan will know if they will truly save money until it launches Jan. 1.

And the uncertainty makes financial planning more difficult for medical providers.

Care for people on marketplace plans represents about 2% of the revenue for University of Missouri Health Care, said Greg Damron, chief financial officer for MU Health Care in Columbia.

"That doesn't sound like a lot," Damron said, "but if you think about it, when you're trying to get to a 4% margin or something, 2% of your revenues is kind of a big deal."

Enhanced subsidies

For 43 days, Democrats in the U.S. Senate used the filibuster to keep the federal government shut down in an effort to preserve the enhanced subsidies enacted as a COVID-19 emergency measure in 2021.

Under the 2010 Affordable Care Act, the actual premiums paid by lower-income people purchasing individual health plans through the federal marketplace were capped as a share of their income. At the lowest end of the income scale, the cap was 2.1%, rising to 9.96% for people between three and four times the federal poverty level, or between $46,950 and $62,600 for a single person.

The enhanced subsidies reduced those caps so people at the lowest end paid no out-of-pocket premiums and no person purchasing an individual plan paid more than 8.5% of their income.

The enhanced subsidies expire Dec. 31. The U.S. Senate will vote in December on a bill extending the subsidies, but there's no promise of a similar vote in the U.S. House and no indication President Donald Trump would sign it if passed.

One result of the enhanced subsidies was dramatic growth in the number of Missourians covered by ACA plans at the same time Medicaid enrollment declined as eligibility reviews began following a freeze tied to the COVID-19 emergency.

In 83% of Missouri counties, an analysis from Washington University shows, new enrollments in marketplace plans exceeded the decline in Medicaid enrollment.

"The rapid growth in marketplace enrollment likely was influenced by enhanced premium tax credits (EPTCs), which were passed in 2021 and significantly lowered the out-of-pocket premiums recipients pay for the marketplace plans," the analysis states.

There are more than 417,000 people in Missouri covered by marketplace plans, up from 257,000 in 2023. Faced with double-digit increases in base premiums and the loss of enhanced subsidies, many may drop health insurance entirely.

"Without that premium support, the belief out there is that it's largely going to hit younger, lower-income people," Damron said. "They're likely going to be the folks that also decide to opt out of insurance coverage altogether."

Small business worries

Small businesses that provide health insurance are also facing tough choices — whether to pass more costs to employees or stop offering coverage altogether, said Brad Jones, Missouri lobbyist for the National Federation of Independent Businesses.

The small group rates approved this fall by the Missouri Department of Commerce and Insurance show average increases of 10% to 19% for 2026.

"For a business with seven or eight employees, it is like buying a suit off the rack," Jones said. "They don't have any negotiating power."

For almost 40 years, the cost of health insurance has been No. 1 among the "10 most severe problems for small business owners" identified by the National Federation of Independent Businesses.

Conducted every four years, the Small Business Problems and Priorities survey ranks 75 issues facing businesses with fewer than 100 employees. The cost of health insurance was cited as an issue by 41% of employers, more than 20 percentage points higher than the second problem on the list, the cost of inventory and supplies.

In 2000, the report shows, almost half of all small businesses offered health insurance, with an average annual cost of about $2,600 per employee. Now, with the average cost greater than $8,000 per employee, fewer than one in three small employers provide coverage.

"When premiums go up, there are hard decisions that have to be made," Jones said. "Deductibles go up to keep costs down. There are a number of things businesses try to do and not drop it all together."

The smallest businesses may not survive if owners decide to seek employment that provides health coverage, said Marie Murphree, executive director of the Kirksville Area Chamber of Commerce.

"We might start seeing some of those go away," said Murphree, who estimated that a fifth of the about 300 businesses in her chamber are individual entrepreneurs.

Higher premiums could be especially damaging in rural areas, Murphree said, where "we already see businesses who struggle to recruit people."

"Now one of the recruitment tools that you have," she said, "you really can no longer offer, because it's out of your ability to afford it."

Rob Gilligan, president of the Cape Girardeau Area Chamber of Commerce, said the "vast majority" of the chamber's 800 members have 50 employees or less. While he said they'd like to offer insurance to employees, the cost can be "prohibitive" with fewer staff to share costs.

The Missouri Chamber of Commerce and Industry offers an insurance plan to businesses with fewer than 50 employees allowing them to pool together to share risk and ideally get more competitive rates.

Gilligan said that while some small business owners have expressed that they will be looking at higher deductible plans in anticipation of much higher premiums this year, they've already had to adapt to rising insurance costs in recent years.

"You just know that the cost of health is one of those things that's going to continue to rise," said Gilligan, whose chamber offers insurance to its employees. "We just have to kind of know that every year we're going to look at that as something that we need to plan for and adapt to."

Farm Bureau alternative

The Affordable Care Act mandates that every plan offered by an employer and every plan on the health care marketplace provide minimum essential coverage. The 10 essential benefits range from hospitalization and office visits to maternity care, mental health treatments and preventive tests.

This year, legislators passed a law allowing the Missouri Farm Bureau to offer coverage that does not include all 10 benefits.

Many farmers and other members of the Farm Bureau, proponents said, are uninsured because they can't afford to buy an individual plan on the marketplace or make too much money to qualify for subsidies.

Members will be able to start buying plans on Jan. 2, with coverage set to begin Feb. 1, said Garrett Hawkins, president of the Farm Bureau. The website will be available starting Dec. 1, he said.

That will leave only about 15 days remaining in the open enrollment period for prospective purchasers to decide if they will sign up with the Farm Bureau, buy a marketplace plan or go without coverage.

Because prospective purchasers will choose from a menu of services, the price for each plan must be individually quoted, Hawkins said.

"We're working feverishly to get the plan up and running," Hawkins said, "but we're just not quite there yet."

The Farm Bureau is a nonprofit agricultural membership organization which partners with for-profit companies to sell various kinds of insurance to its members.

To buy Farm Bureau health coverage, a person has to be a member for 30 days. Anyone can join — the fee is $30 per year.

So far, Hawkins said, the new coverage does not seem to be driving an increase in membership. There are several hundred members who have indicated they are interested in getting a quote, he said.

Once the plan starts accepting applications, Hawkins said, there will be no "open enrollment" period. The coverage will be available for purchase at any time.

Hawkins has big ambitions for the coverage. Affordable health coverage can mean more people will stay in farming and pass their land on to a new generation.

"My goal is that this helps bring young people home to the farm," Hawkins said. "My hope is it will allow a spouse to return home to the farm who is working off the farm solely to get benefits for the family."

A tough choice

Ross-Fisher said the insurance plan she purchased on the federal marketplace established by the 2010 Affordable Care Act was a "godsend" during her cancer treatment.

And when her business suffered during the early days of the COVID-19 pandemic, the enhanced premium tax credits passed by Congress in 2021 had kept insurance coverage within reach for her and her husband and allowed her to keep working for herself.

With those tax credits set to expire, Ross-Fisher is again considering giving up her business for a job with benefits.

Most people turning 65 are eligible for Medicare, which has its own premiums for the various coverages offered. For Ross-Fisher, the nearness of her 65th birthday in 2026 makes it tempting to drop coverage.

And before her cancer, she said, she would have chanced those six months.

Now she's leaning toward seeking full-time work.

"That would mean the end of my consulting business, which I dearly love," she wrote in an email, "but under the circumstances I think it would be the most financially prudent thing to do."