With deadline for healthcare premium tax credits expiration looming, farmers brace for rate hikes

With deadline for healthcare premium tax credits expiration looming, farmers brace for rate hikes

When Carol Kolseth got her biopsy results back after a routine mammogram in October of 2024, she knew treatments for the cancerous lump in her breast would have to be scheduled around lapses in her health insurance, they told The Daily Yonder.

That's because Carol and her husband — two alfalfa, soybean, and wheat farmers from the small town of Plummer, Minnesota — were about to lose their state-administered insurance plan. Their income had risen above the plan's eligibility mark, which is for people whose income is 200% below the federal poverty line.

That left the Kolseths with two options: Go uninsured, or enroll in an individual health insurance plan through a marketplace administered by the Affordable Care Act.

Given Carol's cancer diagnosis, they went with the second option, signing up for a Blue Cross Blue Shield plan at the silver level that provided them a $4,000 annual deductible. Their income qualified them for an enhanced premium tax credit, which knocked several hundred dollars off their monthly premium.

But now those credits are set to expire at the end of 2025, as Congress did not pass an extension before Dec. 15, the deadline to enroll in individual health coverage for 2026. The Kolseths face a similar dilemma as they did last year: to continue with their health insurance plan — which is set to increase from $1,603 per month to $1,972 without those tax credits — or go uninsured, hoping that Carol's cancer doesn't come back.

The Kolseths are just two of 25.2 million Americans enrolled in an individual marketplace plan who are grappling with a potential hike in their monthly premiums. These plans are available to people who do not get employer-sponsored health insurance. Many enrollees are self-employed or own a small business, like a farm.

The vast majority of these individual marketplace enrollees get coverage through a plan administered by the Affordable Care Act, which is what the enhanced premium tax credits apply to. In 2023, 93% of enrollees with an Affordable Care Act plan received a credit that lowered their monthly premium costs.

The enhanced premium tax credits were first enacted in 2021 by the American Rescue Plan Act. Their goal was to expand the affordability of health coverage options for people who are under the age of 64 and whose incomes are above 100% of the federal poverty line. The credits also apply to people whose incomes are too high to qualify them for Medicaid or the Children's Health Insurance Plan (CHIP). The Inflation Reduction Act (IRA) of 2022 extended the tax credits to the end of 2025.

Over the four years they have been in place, the enhanced premium tax credits saw record enrollment: In 2021, the number of marketplace enrollees with the tax credits was 9.7 million, according to the Center on Budget and Policy Priorities report. In 2025, that number shot up to 21.8 million.

The premium tax credits have been particularly beneficial to people living in states that have not expanded Medicaid eligibility, like Alaska, Kansas and Wyoming. All three states have higher percentages of rural residents, who face higher average health insurance premiums than those in urban areas.

"This may be in part because rural areas have fewer people living across a greater area," said Elizabeth Zhang, a research assistant on the health policy team at the Center on Budget and Policy Priorities. "This discourages competition between health plans and also makes it harder for health plans to spread out healthcare costs and risks among enrollees."

On Oct. 1, 2025, a government shutdown was initiated by Congress because of bipartisan disagreements over whether to extend the enhanced premium tax credits. The shutdown was the longest in U.S. history, lasting 43 days.

According to data compiled by KFF Health News, 27% of all farmers and ranchers rely on individual market coverage. Farming is the fourth-most common occupation to rely on individual marketplace coverage, behind chiropractors, musicians, and real estate agents.

This means that farming is one of the occupations that will be most affected when the premium tax credits expire at the end of the year. For many, this makes the difference between having health insurance and going uninsured.

"There's going to be widespread coverage losses with people seeing premium numbers that they aren't able to afford with all the other cost pressures that they're facing," Zhang said. "A lot of people are going to drop health coverage altogether as a result of these expiring tax credits."

Carol Kolseth said that she and her husband are some of the lucky ones — they don't have house or car payments to account for each month. While she's certainly worried for their health if they go without insurance (she's 53 years old and her husband is 61), Carol is most concerned about what rising premium costs could mean for the younger generation of farmers.

"Every farmer watches their expenses really, really close," Carol said. "I think this is going to be really hard for younger farmers… Who's going to do it if it's so discouraging?"

That's the reality facing Kaitlyn Kimball, who runs a USDA-certified organic fruit, vegetable, and flower farm in Naugatuck, Connecticut. Kaitlyn and her husband, Lawrence, rely on individual marketplace coverage, which costs them about $450 a month with a $10,000 deductible. Even with the tax credits, the Kimballs' premiums have doubled over the last two years as their income has risen.

Many small business owners face a paradox when dealing with health insurance premiums, which often rise as a person's income rises. Sometimes, this increase can be so substantial that it negates the business's growing profits.

"I know a lot of people who don't grow their business to try to keep their profits down so that they can keep them and their families on [health] insurance," Kaitlyn said.

As first-generation farmers, the Kimballs are actively trying to grow their business, which is one of the only of its kind in the Naugatuck area and employs up to 12 people during the peak season. They're bracing for an increase in their monthly expenses next year if the premium tax credits end. The $450 monthly premium they pay now is estimated to rise to $500 per month.

"It's really hard to budget for that increase because it's so substantial," Kaitlyn said. "But we also can't go without coverage."

This story was produced by The Daily Yonder and reviewed and distributed by Stacker.