The Affordable Care Act individual health insurance markets will be more expensive and more burdensome to use in 2026 but the fundamental structure of these markets will remain.
Let’s talk about more expensive first.
The enhanced premium tax credits that were passed in March 2021 and renewed in August 2022 are scheduled to expire on December 31, 2025. These credits did two things. First, for individuals with incomes over 400% Federal Poverty Level (~$62,000 for a single individual and $128K for a family of four in the contigous 48 states) premium tax credits WILL NOT BE AVAILABLE. Under current policy in 2025, an individual with an income over 400% FPL will “only” pay 8.5% of their Modified Adjusted Gross Income for the premium of the 2nd least expensive Silver plan. Without subsidies, and depending on age/county the cheapest plans could be 10% to 25% of gross income for this group.
The other big change is for individuals with incomes between 100-400% FPL ($15,500-$62000-ish). The personal contribution amount for the benchmark plan will increase by several percentage points of income. Under current policy, individuals with incomes under 150% FPL, the benchmark plan (a Silver plan with extra deductible help that reduces cost-sharing substantially) has a zero dollar expected personal contribution. Zero premium gold and bronze plans are often available to 250% to 300% FPL. Next year, someone making 150% FPL (~$23,000ish) will be paying about $60 per month (~4% of income) for that same benchmark plan.
There are a couple of other changes, we can assume the cheapest plans will have higher deductibles as the calculation used to determine the maximum allowable cost-sharing changed and we can also anticipate that the Silver plans will be slightly less generous in their coverage due to a regulatory change.
Burdensome
The big change in a recent rule that was finalized is a lot more administrative burden. For people who are currently enrolled and want to maintain their coverage in 2026, you need to go in and validate/update your estimated income for 2025 after August in order to continue to receive premium tax credits in 2026. You will also need to make sure to file your taxes and reconcile any previously received tax credits. During the Open Enrollment Period (November through December,) please go back into your Healthcare.gov account and MAKE AN ACTIVE CHOICE even if the choice is to keep exactly what you have now. Passive choice is being strongly discouraged and frictional.
There will be a lot more double checking and validation of income throughout the entire process. A lot more paperwork will be required.
New enrollees will need to have their incomes validated before they can receive premium tax credits.
There are other things happening, but the fundamental outline of the ACA markets will look like it was in 2020 before COVID in 2026 rather than fundamentally transformed.
gene108
Thanks David. I was not aware of having to update my income in August.
How will this change to passive re-enrollment affect states that run their own exchanges?
David Anderson
@gene108: I need to read my notes on the SBM question
MazeDancer
Wonder if there is any hope that the continued assault on people’s healthcare – including insurance companies tendency to deny coverage – will encourage support for the US to join the rest of the civilized world and provide universal care.
Have never seen charts that show “Here’s what you pay now” and “Here’s how much your taxes would be if we had universal care”.
Medicare for All doesn’t help. Medicare costs almost 200 bucks. 4 people would be insane.
Of course, insurance companies will pollute the airwaves with lies.
But, as Jefferson said in the Declaration: “…mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.”
But, eventually, people rise up.
dnfree
@MazeDancer: It has been noted that instead of “Medicare for All”, we should be talking about “Medicaid for All”, but the association with poverty makes that harder to sell, even though it’s more accurate.
Sure Lurkalot
@MazeDancer: @dnfree:
There are many real world examples of health care with far fewer barriers to access, none perfect, but all more inclusive and less expensive.
But it’s unsurprising that the US has embraced the pay to play model, run government like a business means any provision of societal good must profit someone somewhere. It’s most perverse and deeply entrenched.
Cheryl from Maryland
OT, but I see that under Trump, RFK Jr. and Dr. Oz (spit), starting in 2026, there will be pilot programs for “prior authorization” (e.g., refusals) for certain Medicare procedures in certain states. Of the six states selected, Florida ISN’T ONE (no surprise), but Texas and Arizona are. It includes only two traditionally Blue states — Washington and New Jersey. Will red states scream at denials?
Ohio Mom
@dnfree: Yes, that is a soapbox of mine. Ohio Son has Medicaid because of his autism, and it’s the most comprehensive, hassle-free insurance any of the three of us has ever had.
That said, we don’t have the problem many on Medicaid have of not being able to find doctors who will settle for Medicaid’s paltry reimbursement. Our county has an indigent care levy that makes up the difference for patients using our children’s
hospital and our medical school-affiliated health system.
I do wonder how that finding will hold out in the coming years, with those deep cuts to Medicaid.
rikyrah
really appreciate having you here. You always break it down so well for us.
rikyrah
@dnfree:
ICAM.
Medicaid has been slandered,but, it would be a far better option than Medicare for All
Juju
Did you mean 2026 rather than 2025 when you mentioned that you have to validate/ estimate your income after August?
sab
@Ohio Mom: I am desperately hoping that the ban property tax issue doesn’t ever make it to the ballot because we Ohioans will probably pass it.
David Anderson
@Juju: clarified
TheQuietOne
My wife and I watched an episode of “The Repair Shop” from the BBC where they celebrated the 75th anniversary of the NHS. The pride they take in it almost made me cry for the nonsense we have to go through. My wife has Parkinson’s. The first line medicine Carbidopa/Levodopa works to alleviate her symptoms, but gives her bad stomach upset. Her neurologist suggested another, Crexont, that works just as well but is easier on her stomach. But her Part D plan won’t cover it and we can’t afford $500+ a month to pay out of pocket. The $2000 (Thanks, Joe, sincerely) limit only applies to drugs on their formulary so we would pay the whole shot all year. Just get people health care without the main mission being to create billionaires. Why is that too much to ask?