The expiration of subsidies for Affordable Care Act (ACA) health insurance is likely to have a significant impact on the healthcare sector in the US. According to healthcare policy experts, Americans who rely on these subsidies will probably switch to plans with lower monthly premiums and high deductibles or decide not to purchase any coverage. This will have a serious and damaging impact on the entire sector, including rural hospitals and people with employer-sponsored health insurance.
The average annual premium for ACA plan enrollees is estimated to more than double, from $888 this year to $1,904 in 2026, according to a KFF analysis. This will lead to economic downstream effects, including a significant portion of people dropping their marketplace coverage and being uninsured. Emma Wager, a senior policy analyst for KFF’s program on the ACA, notes that this will not only impact those who drop their coverage but also everyone else, as it will lead to a sicker pool of people remaining in the program.
A recent survey by KFF found that if the subsidies expire, a third of the 24 million US adults who buy coverage through the ACA marketplace said they were likely to select a lower-premium plan with higher deductibles and out-of-pocket costs, while a quarter of enrollees said they would be “very likely” to go uninsured. Gerard Anderson, a professor of health policy and management at Johns Hopkins University, warns that this will lead to a “death spiral” where the healthy people drop out, and the sicker people are the only ones who stay in the program until it becomes no longer sustainable.
The expiration of subsidies will also have a disproportionate impact on rural areas, where people are more likely to rely on the ACA and rural hospitals. The Century Foundation, a progressive think tank, notes that people in rural areas will see an even greater premium increase than those in urban areas. This will make it harder for small and rural hospitals to operate, as they will have to treat more people who do not have the means to pay for their care. Natasha Murphy, director of health policy at the Center for American Progress, notes that the full impact of the subsidies expiring won’t become apparent until open enrollment ends on January 15.