Congress Lets Obamacare Subsidies Die, Premiums Poised to Surge

The Night the Clock Ran Out

Washington—At 11:59 p.m. on Capitol Hill, the gavel fell on the 117th Congress without a single line of text extending the Affordable Care Act’s enhanced subsidies. Within minutes, actuaries at every major insurer began recalculating 2024 rates for 13 million Americans who buy coverage through the federal and state marketplaces.

From $10 to $410 in One Renewal Cycle

In Phoenix, 62-year-old Maria Alvarez—who works the dawn shift at a grocery bakery—opened her insurer’s app Tuesday morning. Her silver-plan premium, discounted this year to $10 by the soon-to-expire subsidies, is projected to jump to $410 a month. “That’s my car payment, my electric bill and half my rent,” she said. “I can’t sell my blood fast enough to cover it.”

“We told lawmakers this cliff was coming,” said Cynthia Cox, a vice president at the Kaiser Family Foundation. “They looked at the calendar, looked at each other—and left town.”

How the Subsidies Worked—and Why They Vanished

The 2021 American Rescue Plan expanded tax credits that capped insurance costs at 8.5 % of income for everyone who qualifies. Those credits expire on 1 January because the $1.7-trillion omnibus spending bill passed just before Christmas omitted an extension. The House had approved a continuation; the Senate never took a vote.

• Without action, the average benchmark premium will rise 53 % nationwide, according to the Department of Health & Human Services.
• Rural counties face the steepest hikes—some topping 100 %—because they have only one insurer.
• Young adults will feel the pinch too; their subsidies shrink the most in percentage terms.

The Political Blame Game

Senate Finance Chair Ron Wyden (D-OR) accused Republicans of “holding hostage” a bipartisan tax package that would have carried the subsidy fix. GOP leaders counter that Democrats refused to negotiate on work requirements for Medicaid. “Both parties played chicken,” said health-policy lobbyist Rodney Whitlock, “and the loser is the person checking the price of insulin on Healthcare.gov.”

What Happens Next

Insurers must submit final 2024 rates by 5 July. Some states—California, Colorado, New Mexico—plan to use state funds to blunt the increase. Others, including Texas and Florida, say they lack the budget. Congress could retroactively restore subsidies if a new bill passes this fall, but insurers warn that mid-year rate cuts are logistically messy and could push carriers to exit the marketplaces altogether.

A Widening Coverage Gap

Before the subsidies, an estimated 3 million people dropped coverage because it was too expensive. Health-policy analysts predict that number could double, pushing the national uninsured rate upward for the first time since 2014. Hospitals in red states are already bracing for a surge in uncompensated care. “We’re looking at closing two more rural clinics,” said Dr. Karen Pollard, chief medical officer of a 17-hospital chain in Georgia. “We simply can’t absorb it.”

The Human Toll

Back in Phoenix, Maria Alvarez is contemplating her options: skip medications, cancel her lease, or hope Congress returns with a rescue plan. “I voted because they promised they’d protect my health care,” she said, clutching a vial of insulin she can no longer afford to refrigerate. “I just didn’t know the promise had an expiration date.”