Rising costs on health care marketplace could lead to 'disenrollment crisis,' Nebraska advocates fear

Susan Alleman, a Lincoln resident who directs a small nonprofit organization, had gone without health insurance for most of her adult life.

She was finally able to obtain coverage through the federal marketplace created by the Affordable Care Act, known as HealthCare.gov, after it opened in 2013.

The premiums were low at first but crept up over time. After her late partner was diagnosed with stage 4 head and neck cancer, Alleman had to choose between caring for him, her son and her foster children or paying for her own health care coverage. She opted out in 2018.

She was able to resume coverage in 2023 after enhanced premium tax credits, approved initially in 2021 through the pandemic-era American Rescue Plan Act, made marketplace plans more affordable for Americans who don't get coverage through work, Medicare or Medicaid. The timing was fortuitous: Alleman was diagnosed with an aggressive form of breast cancer in 2024.

But the enhanced credits now are set to expire at the end of the year. In the meantime, they've become the point of contention in the government shutdown. Democrats in Congress are demanding renewal as part of any funding measure to reopen the government. Republicans are insisting that an extension shouldn't be part of a funding measure.

Without an extension, Alleman, 56, is concerned her premium will increase and she won't be able to afford her coverage, which could jeopardize her ability to get the testing, scans and doctors' appointments she needs.

"If I have to lose my health insurance coverage next year, it will be a huge struggle to continue to get the care that I need," she said.

Kelsey Arends, senior staff attorney for health care access with Nebraska Appleseed, said Alleman isn't the only Nebraskan who will struggle if the expanded tax credits aren't extended.

The majority of Nebraskans receive health care insurance through their employers. But more than 135,000 Nebraskans — many of them low- to middle-income residents but also small-business owners, farmers and ranchers — currently are covered through the marketplace. More than 90% of them rely on tax credits to afford their coverage.

Open enrollment for the federal health insurance marketplace begins Saturday. Participants have to sign up by Dec. 15 in order for coverage to begin Jan. 1.

Alleman and other participants already have begun receiving notices indicating that their premiums will increase next year. The latest calculation this week by KFF, the independent health policy research organization, indicated that the amount insurers nationwide will charge for coverage on the marketplace will increase 26% on average in 2026, more than double last year's 7% average increase.

But KFF also estimated that the average enrollee who receives subsidies will see their monthly premium payments more than double, increasing by about 114% on average, if the enhanced credits expire as scheduled. More than 15,000 Nebraskans are expected to lose marketplace coverage as a result, the organization estimated. Prices now are posted on the government website, allowing consumers to browse them.

"We know a lot of people are in the same spot and that we are going to be facing another health coverage disenrollment crisis," Arends said.

Expiration of marketplace tax credits would come in addition to cuts to health care programs through the "One Big Beautiful Bill" Act signed into law in July, which KFF estimated would add 30,000 Nebraskans to uninsured rolls due to changes in Medicaid alone.

Appleseed and other groups have argued that such cuts won't be felt just by those who lose coverage but also by those with private insurance and seniors with Medicare as the health care system faces additional costs due to uncompensated care.

Employers who offer health insurance and their employees already are bracing for higher than normal increases in premiums — not to mention deductibles and co-pays — for workplace insurance this fall.

Rep. Don Bacon, R-Nebraska, said Tuesday that most Republicans are willing to negotiate on ACA subsidies and that Democrats now appear willing to come to an agreement.

Negotiations, he said, should have been occurring during the shutdown. Rep. Jennifer Kiggans of Virginia has drafted a measure that would extend the credits for a year as an appropriations bill rather than a continuing resolution.

However, Bacon said, most Republicans believe there should be some changes, namely, income caps that prevent Americans who earn hundreds of thousands of dollars a year from obtaining the subsidies.

Lawmakers also want to ensure that credits are going to individuals, not companies, he said, a concern raised by Senate Majority Leader John Thune of South Dakota.

"If we can find some common ground in those two areas, I think there's plenty of support to come to a compromise," Bacon said.

Rep. Mike Flood, R-Nebraska, said he is open-minded about addressing the issue, although he doesn't like the idea of making big changes on short notice and believes negotiations need to begin with two sides working in good faith.

"Democrats need to vote to reopen the government and work towards compromise on issues instead of holding the federal government and thousands of American families hostage," he said.

But Arends said the issue can't wait until the end of the year when the credits expire because people have to start enrolling soon.

Amy Behnke, CEO of the Health Care Association of Nebraska, said she is concerned that people will start enrolling, see the new prices without the enhanced tax credits and be frightened off by the higher rates.

The association is a statewide organization that works with all seven of Nebraska's federally qualified health centers, including OneWorld Community Health Centers in the Omaha area. All have outreach and enrollment staff who work with patients to help them navigate health insurance enrollment, whether through the marketplace or Medicaid.

A significant number of health center patients, she said, don't have access to insurance through their employers. If they do, it's often not affordable for their families.

"The marketplace coverage is really their lifeline for health insurance coverage," Behnke said. "So the amount of unknown that's out there for them right now is just creating a lot of anxiety."

What's not clear is whether people who enroll early will be able to change their selections if Congress later extends the subsidies. Even if it does, educating enrollees about the changes after the fact will be challenging, she said.

"They may pick a plan that maybe has less coverage," Behnke said. "They may drop coverage altogether ... It's just going to be really challenging for them to decide what to do."

Arends noted that premium tax credits have always been part of the ACA. The enhancements increased the credits to make premiums more affordable for lower-income people and extended the credits to some with annual incomes over 400% of the federal poverty level — $62,600 for individuals and $128,600 for a family of four in 2025.

Without the enhanced credits, those middle-income families would lose all subsidies, including the current cost cap that limits them to paying 8.5% of their income on premiums.

But the lowest-income Nebraskans would be hurt the most, with premiums increasing $562 on average for those earning under 250% of the federal poverty level. That's an annual income of $39,125 for an individual or $80,375 for a family of four.

Older individuals approaching retirement also would see increases. One model, she said, indicates that a 64-year-old Nebraska couple with an annual income of $90,000 would see a premium increase of more than $32,000 a year if the enhanced credits expire.

Rural areas of the state would face particular challenges. An analysis by the Center for American Progress indicated that the highest share of marketplace enrollees in 2024 — some 51,000 — lived in Nebraska's third congressional district. Some 96% received the enhanced credits.

Alleman said the plan she got in 2023, and carried over in 2024 and 2025, would cost $800 a month without the tax credits. Based on her income, they cover a significant share of her monthly premiums.

The plan comes with a deductible of $7,500. Back in the day, that would have been considered catastrophic coverage, she said. But it meant that she had insurance.

But Alleman said there's no way she could pay $800 a month if the credits go away. The small nonprofit where she works is unable to offer health insurance. She has considered trying to pick up additional jobs, but continuing to work in her current position while undergoing cancer treatment has proved challenging enough.

And having cancer is expensive: Just one of the infusions of the cancer drug Keytruda she received every three weeks for a year was priced at about $40,500.

"It's very easy to see how your average Americans go bankrupt when they are faced with a health care crisis," she said.