Small businesses, self-employed brace for sharp health insurance premium spikes

The big budget bill that President Donald Trump signed into law in July allowed tax credits under the Affordable Care Act to expire. That means health insurance costs will go up significantly for millions, disproportionately hitting small business owners and self-employed people.

Andrea Deutsch expects to pay more than twice as much for health insurance next year. The 57-year-old calculates she'll have to shell out more than $1,400 a month for coverage.

"As a Type 1 diabetic, I can't go without health insurance," Deutsch said.

She owns a pet store outside of Philadelphia and recently got a letter from her insurer that premiums are going up next year. Insurers say they are hiking prices for several reasons including rising costs for care and drugs, tariffs, and because Congress is poised to let generous tax credits expire. Those credits saved Deutsch $700 every month; that's now money she needs to find in her budget.

"I mean, it's not like I'm living high off the hog," said Deutsch. "I have a very small house. My wardrobe is mostly made up of free t-shirts I get at trade shows."

In 2021, Congress made insurance more affordable for 90% of people buying on the marketplaces. The expansion allowed people who earn more than $62,000 a year to get these credits, too. But if they go away, nearly 22 million people will pay more.

Claire Heyison with the Center for Budget and Policy Priorities worries that the sticker shock will lead some to just forego health insurance altogether.

"The first people to drop their coverage will be people with fewer health issues," she said, "leaving the remaining enrollees more expensive to insure."

Estimates are that about 4 million people would end up dropping marketplace insurance over the next decade. David Chase is with the Small Business Majority, a group that advocates for small business in retail, construction, and several other industries.

Chase is trying to persuade lawmakers to keep these subsidies.

"This is such a big issue that impacts so many people," Chase said. "Small business owners, red states, blue states, older people, younger people, single people, families."

Technically, lawmakers have until Dec. 31 to reinstate the tax credits. But the reality is that people will start making decisions when they go online to choose insurance in November. That includes Andrea Deutsch, the Philly area pet store owner. She's hoping she can still afford coverage.

"I am going to work my butt off to try and make this work," she said. "If I foresee that it's like getting to a point where it's ridiculous, I can't afford it, I'm gonna have to figure out a different plan."

And that might mean shuttering her store of 22 years and taking a different job for the health insurance.