Four million Texans using Affordable Care Act (ACA) marketplace insurance plans are facing possible financial challenges as open enrollment begins next week. This concern is especially pronounced for those benefiting from enhanced federal tax credits enacted during the COVID-19 pandemic, which are poised to expire unless Congress intervenes.
As open enrollment kicks off on November 1, many Texans are beginning to see potential increases in their insurance premiums, causing a wave of “sticker shock” as they explore plan options for 2026. Matt McGough, a policy analyst at the health policy research organization KFF, noted that individuals are becoming increasingly aware of the implications for their budgets.
The current deadlock in Congress complicates matters, as the federal government has been in a shutdown since October 1. Senate Democrats are engaging in a filibuster of a Republican bill that would fund the government at existing levels while sidelining health policy changes that Democrats are advocating for, including the renewal of enhanced ACA tax credits.
The forecast predicts a median 15% increase in marketplace premiums for Texas next year, largely driven by the lack of renewed subsidies. Texas notably opted not to expand Medicaid under the ACA, leaving many individuals in a vulnerable position—earning too much to qualify for Medicaid but not enough to afford private health insurance. The enhanced subsidies, part of the American Rescue Plan in 2021, addressed this gap and contributed to a more than 200% increase in ACA enrollment within the state over the last four years. However, Texas continues to struggle with the highest uninsured rate in the nation, at 16% in 2023.
The enhancements to the subsidies allowed for greater assistance for those earning above the previous income limits, particularly for families making over 400% of the federal poverty level, which translates to approximately $128,000 for a family of four. These credits cap health insurance premium payments at 8.5% of income, helping to mitigate the financial burden for many.
Speculative analyses by KFF reveal stark contrasts in potential premium hikes. For instance, a couple aged 60 with an income of $85,000 living in Texas’ 3rd congressional district might see their average monthly payment rise dramatically from $602 to $2,455 if the enhanced subsidies are allowed to expire. Similarly, a 40-year-old earning $32,000 could see premiums rise from $58 to $180. Critics, however, argue that these figures may be exaggerated, asserting that most households would experience less severe increases.
Republican leaders, including U.S. Rep. Keith Self, downplay the urgency surrounding the potential subsidy expiration, suggesting the situation has been blown out of proportion. They advocate for an end to what they label as temporary COVID-era policies, while calling for a reevaluation of the ACA altogether, which they say creates dependency on federal subsidies. U.S. Rep. Chip Roy also emphasized that discussions surrounding the subsidies should not be political fodder but rather a focus on the shortcomings of the ACA in terms of affordability.
On the Democratic side, there are growing concerns about the consequences of losing these enhanced credits. U.S. Rep. Julie Johnson voiced her worries that nearly 100,000 constituents would face substantial premium increases, potentially leading to avoidance of medical care and increased long-term costs to taxpayers.
As Congress continues to navigate the impasse, the fate of the ACA subsidies remains uncertain, leaving millions of Texans in a precarious position as they prepare for the upcoming enrollment period.
