Affordable Care Act tax Credits Set To Expire Driving Up Premium Costs

Well, the government shut down. Millions of Americans are facing another financial hit, skyrocketing health care costs. At the end of this year, tax credits that help more than 20 million people afford coverage are set to expire. Now, in some cases, premiums could spike by as much as 600 percent. Here in New York, families could see their monthly payments more than double. Joining us now is Daniel Hornung, policy fellow at the Stanford Institute of Economic Policy Research and a former White House official under Presidents Obama and Biden. We welcome you. Can you explain what these tax credits are and why health care premiums are going to spike so much come the first of November? Well, first, it's good to be with you. You know, these are the premium tax credits for Obamacare, the Affordable Care Act. And so what that means is if you are purchasing your health insurance through the Obamacare exchange, then you are, in most cases, able to see a reduction in what you would otherwise pay because of these tax credits. You don't get it like normal tax credits at the end of the year. You get it right as you're paying your insurance bill each month. And so these credits are set to expire at the end of the year. And part of the issue around the shutdown right now is that folks will start getting notifications as soon as November 1st from their insurance company telling them that their insurance premiums are going to go up. And so part of the fight right now is saying, can we try to extend those tax credits before that November 1st deadline so that people don't get those letters in the mail saying, as you noted, that their insurance premiums could go up really in New York anywhere between a few hundred dollars for a single person all the way up to about a thousand dollars a month for a family of four. And how will employer covered workers or those paying full price be affected by this? Well, if you get your health care through your employer, you're still going to see a pretty substantial increase in your health insurance premium in 2026. But it won't be quite that magnitude that I talked about with the premium tax credits. So, you know, one of the things that we've seen is insurers saying that they're planning to raise their premiums by around 10, 15, 20 percent in 2026. That's obviously not a pleasant increase at all, but it doesn't even compare to the close to 100 percent increase that some folks who are on the exchange will see. So, Daniel, where is the middle ground here for both sides who are obviously at this point sticking to their guns here before any type of negotiation really gets underway? Well, I think part of the hope would be that the parties can come together around a deal that says, you know, by November 1st, this health care issue will be dealt with. And in exchange, the government can be opened up immediately. We'll have to see where it goes in the next several days. But obviously, I think the hope for everybody, not just because of this health care issue, but because of so many issues like the ones you talked about earlier in your segment, is that the government can get open and that this health care issue can get dealt with on a timely basis because there's not a lot of time to deal with it. So what should families do if they're starting to get these notices in the mail that's ahead of the open enrollment? Well, you know, this is part of the challenge here, because if you get a notice that says your premium is going to go up substantially, for some families, it's going to be hard to sign up for insurance again. That's why the nonpartisan Congressional Budget Office estimates that four million folks will actually go without insurance. So, you know, my hope is less advice for families and more advice for Congress that they can deal with this so that families are not dealing with these premium increases in 2026, because the sad reality is that we know for a lot of middle class and working families, they just can't afford an increase of several hundred dollars a month on their health insurance premiums. Daniel Harding, thank you. The Policy Fellow at Stanford University Institute Economic Policy Research and former White House official, we thank you for taking a few moments for us. Thank you. Thank you, Daniel.