As healthcare premiums soar, many Americans relying on the Affordable Care Act face tough decisions during the open enrollment period. Rising costs are forcing some to downgrade their plans, while others grapple with potentially life-altering financial impacts.
Tracy Barber, a Tucson resident, has used marketplace health insurance since her retirement. This year, she faces a daunting choice: her gold plan premium will surge from $863 to nearly $1,500 monthly, a leap that adds $7,600 annually to her expenses. Unable to shoulder this burden, Barber will switch to a silver plan, saving some money but facing higher deductibles and copays – still, this choice will increase her yearly costs by $6,000.
“I knew these subsidies were going to expire,” Barber noted, but the near doubling of premiums was unexpected.
The expiration of subsidies was a critical issue during the longest government shutdown in history, with Democrats advocating for an extension beyond the December 31 deadline.
Barber is among over 423,000 Arizonans and 24 million Americans who depend on the ACA. With the Inflation Reduction Act, subsidies were expanded in 2022, offering enhanced premium tax credits to middle-income earners, a benefit previously reserved for low-income individuals.
These subsidies operate on a sliding scale, creating a “subsidy cliff” for those earning just above 400% of the federal poverty level. As subsidies vanish, nearly 22 million Americans risk losing coverage due to unaffordable costs.
Throughout the shutdown, Democrats refused to back a temporary government reopening proposal without a subsidy extension agreement. Republicans, led by President Donald Trump at the time, stood firm against negotiating subsidies until a broader spending agreement was reached.
A breakthrough came when seven Democratic senators and one Independent allied with Republicans to advance a bill reopening the government until January 30. Arizona Senators Mark Kelly and Ruben Gallego, among others, criticized the deal as a surrender.
The deal omitted an ACA tax credit extension, but Senate Majority Leader John Thune committed to a mid-December vote on the matter.
“For Democrats, they got a win with getting the government back running. However, they lost the policy hostage battle that took place,” said Mike Noble, CEO of Noble Predictive Insights.
In Arizona, over 370,000 individuals benefited from premium tax credits this year, according to KFF, a health policy research group.
Without these subsidies, Barber and her husband face spending over 20% of their fixed income on healthcare premiums. “This insurance is more than $400 more than our mortgage,” Barber lamented.
Democrats are leveraging this looming financial strain to remind voters about Republican resistance to subsidy extensions, especially targeting figures like Reps. Andy Biggs and David Schweikert, both gubernatorial candidates representing districts with rising premiums.
“The shutdown fight reinforced the perception of dysfunction” in Congress, Noble said, warning it could hurt incumbents among suburban moderates. “Voters may not know the legislative details, but they know when premiums go up and they know who’s in charge when it happens.”
Michelle Unger, a real estate agent in Gilbert, is feeling the pinch too. Her bronze plan costs $2,100 a month for her family, but due to her health needs, she’s forced to upgrade to a gold plan costing $4,170 monthly when subsidies end.
“I literally felt like I got punched in the chest,” Unger expressed. The financial strain might force her family to sell their home. “I don’t agree with the shutdown, but I do agree with the Democratic Party standing firm,” she added.
The Congressional Budget Office estimates a two-year credit extension at $60 billion, with a decade-long extension costing $350 billion.
Von Packard, a Mesa-based single dad and contractor, also switched to a gold plan to manage emergency and mental health care costs. His premiums will rise from $49 to $719 monthly. “There’s a lot of other things I would rather be doing with $700 a month,” Packard said, emphasizing the financial strain.
Packard has tried voicing his concerns to Biggs, but feels unheard. “They usually shut me off when I start talking,” he explained.
This article first appeared on Cronkite News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
