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The Affordable Care Act (ACA) open enrollment period kicks off on Saturday (November 1), with more than 24 million Americans relying on the program for health insurance. This year's enrollment is marked by significant changes, as premiums are set to rise sharply due to the expiration of enhanced subsidies that have kept costs lower for many families.
The enhanced premium tax credits, introduced in 2021 and extended through 2025 by the Inflation Reduction Act, are expiring at the end of this year. These credits increased financial assistance for ACA Marketplace enrollees, particularly benefiting middle-income individuals. Without these credits, many enrollees will face a "double whammy" of losing their tax credits and encountering rising premiums.
The expiration of these credits means that subsidized enrollees could see their annual premium payments more than double. For instance, an individual earning $28,000 annually would see their premium payments rise from around $325 to $1,562 in 2026. Additionally, insurers are proposing a median rate increase of 18% due to rising healthcare costs and the loss of subsidies.
The impact will be particularly severe for those with incomes above 400% of the federal poverty level, who will lose financial assistance entirely. A 60-year-old couple making $85,000 could see their yearly premium payments increase by over $22,600, consuming about a quarter of their annual income.
As the enrollment period begins, many Americans are expected to face tough decisions regarding their healthcare coverage, with some considering going uninsured due to the rising costs.