The upcoming election will likely affect the affordability of health insurance for millions. That is because pandemic-era subsidies that lowered the cost of Affordable Care Act marketplace premiums are set to expire next year unless Congress and the next president’s administration take action to preserve them.
Democratic presidential candidate Vice President Kamala Harris has pledged to make the enhanced subsidies on premiums permanent, while her Republican opponent, Donald Trump, has made no such commitment and during his presidency repeatedly worked to weaken the ACA.
Among the almost 20 million affected by the potential sunsetting of the subsidies is business owner Chrysa Ostenso. She said she depends on them to keep her family’s health insurance costs from breaking the bank. If Ostenso’s expenses increase, her household may not be the only one affected in the heavily Republican region where she lives and works. That is because she and her husband, Erik Ostenso, operate the only optometry practice in rural Rusk County, Wisconsin, and they may permanently close its doors years ahead of schedule if their insurance bills spike.
For more than 30 years, the Ostensos’ small business has provided health care services to nearby residents. But Chrysa Ostenso’s own health insurance costs have added financial pressure to operating the practice. That changed after President Joe Biden’s administration signed the American Rescue Plan and Inflation Reduction Act, which increased subsidies for low-income households. Those laws also expanded subsidy access to moderate-income households like the Ostensos’. Now, a household of two earning above $81,760 can access tax credits, and insurance costs are capped at 8.5% of household income, whereas before households were excluded from such benefits.
Those policies drove the Ostensos’ premiums down from nearly $2,000 per month to less than $500 per month for a plan that covers both Chrysa Ostenso and her husband, she said. “That was such a relief to us as small business owners, but the great thing was that we were able to turn a lot of those savings into raises for our employees,” she said.
Before those changes, Chrysa Ostenso said her employees often went without health insurance. With newly increased salaries and access to enhanced premium tax subsidies of their own, some were finally able to sign up for ACA marketplace health care plans themselves.
The Biden-era policies contributed to the lowest rate of uninsured U.S. residents in history. If they are allowed to expire next year, experts such as Miranda Dietz, a policy research specialist at the University of California, Berkeley’s Labor Center, said they worry that health insurance costs and the rate of uninsured Americans will increase significantly.
Allowing Biden administration policies to sunset would cause subsidies for lower-income families to be “significantly lower” and subsidies for moderate-income people such as Chrysa Ostenso, whose household income is more than 400% of the federal poverty level, to be “totally eliminated,” Dietz said. Those changes would raise costs for the nearly 20 million enrollees that rely on ACA subsidies, according to Jessica Altman, executive director of Covered California, that state’s ACA exchange. The Washington-based Urban Institute published a report that estimated that the expiration of enhanced subsidies could cause 4 million people across the country to become uninsured.
And people who maintain their insurance plans will also feel the effect. Without the enhanced subsidies, healthier people may be less likely to buy insurance, leading to a sicker overall enrolled population. Consequently, health insurance premiums across the board would be higher, Dietz said.
Harris’ pledge to make the enhanced subsidies permanent appears on her campaign website and in her 82-page economic plan. The Harris campaign did not respond to a request for comment.
While president, Trump tried but failed to replace the ACA. During the presidential debate last month, Trump again said he would fix the ACA or develop an alternative to the law, but he has offered few details about how he would make that happen. The Trump campaign did not respond to a request for comment on this story. If Trump’s past administration is any guide, a second Trump term may lead to an increase in ACA premiums and in the uninsured population.
During his first term, Trump eliminated the financial penalty for not having health insurance and expanded access to inferior coverage that cost less — so-called “junk” plans — on the individual market. Those were among the changes to the ACA that increased the uninsured population by 2.3 million in the first three years of his presidency. (In Wisconsin alone, almost 30,000 more people were uninsured after the first three years of Trump’s presidency.) The Trump administration also raised annual costs for those who remained insured by an ACA plan by $404 on average, according to the Center for American Progress, a liberal-leaning think tank.
Republicans in the House of Representatives are now seeking an end to Biden-era enhancements through their Fiscal Sanity to Save America 2025 budget proposal, which refers to the subsidies as “taxpayer bailouts.”
If the next Congress allows enhanced premium tax subsidies to expire, millions of people will likely see their health insurance costs rise, according to KFF, which projected that premiums will jump by 85% in Wisconsin.
Chrysa Ostenso said those increased expenses may make maintaining her practice’s profitability while also paying her employees’ their current wages impossible. With that increased financial pressure, the small business the Ostensos have been running for decades may have to shutter years before they were planning to retire.
“If we all of a sudden had to pay $1,000 or $1,500 a month more, [our business] might close,” Chrysa Ostenso said. “It’s looking like when we close our doors, there will not be an optometrist in this county anymore.”
