How Marketplace Costs and Premiums Will Change if American Rescue Plan Subsidies Expire

In a new Policy Watch, KFF analysts explore the potential impact of the expiration of the American Rescue Plan Act’s enhanced financial help and new eligibility for the Affordable Care Act’s health insurance Marketplace federal subsidies. While the COVID-19 relief legislation passed earlier this year provides greater subsidy assistance through 2022, Democrats in Congress are currently considering making the temporary federal help permanent or extending it as part of their planned budget reconciliation legislation.

The authors describe what is at stake in the current debate, from the additional costs to the federal government if the temporary relief is extended, to premium payments and/or deductibles rising for the millions of people currently receiving enhanced subsidies. The average Marketplace enrollee would see their premiums doubled and would have to pay about $800 more if enrolled the whole year. Low-income people, who are 42% of Marketplace enrollees, pay nothing or a minimal amount in premiums currently and would see the largest percentage increase in premium costs if the subsidies expire.

Also touched on are the potential political implications of the expiration of the enhanced subsidy assistance as Marketplace enrollees would receive their renewal notices in October, 2022, weeks before the midterm congressional elections.