CLEVELAND — If subsidies expire at the end of this year, healthcare premiums could rise significantly for hundreds of thousands of people insured through the Affordable Care Act marketplace in 2026.
Ray Herschman owns Blue Sky Brews; he also teaches about healthcare finance at Case Western Reserve University. He’s been working in health care finance for over 30 years.
He teaches people about health care finance, how the health care system is funded, where the money comes from, where the money goes and the challenges of affordability in health care.
He gets his healthcare through the Affordable Care Act Marketplace.
“My insurance premiums for the plan I’m purchasing to go to the Cleveland clinic is going up from $35,000 a year to $42,500 a year,” said Herschman.
Julian Palombi manages Blue Sky; he also gets his insurance through the ACA.
“The whole process of trying to find health insurance through the marketplaces is making me feel very nervous,” said Palombi.
Herschman and Palombi are among 600,000 Ohioans who get their healthcare through the ACA or healthcare.gov, an online platform where people can compare and buy health insurance policies.
“I have 15 days to weigh out the options, whether I’m going to get it or not,” said Palombi.
Right now, Palombi pays about $250 a month thanks to a discount based on income that reduces his monthly premium, and unless Congress acts before the end of the year, subsidies like the one he receives will expire at the end of 2025.
“With those subsidies going away, people are seeing their premiums go from $100 a month to $500 a month,” said Herschman. “Other people are seeing, you know, substantially higher increases than that.”
Those subsidies come as a refundable tax credit. According to the Health Policy Institute of Ohio, the American Rescue Plan Act in 2021 increased those subsidies, which led to a decrease in healthcare premiums and an increase in marketplace enrollment.
The Health Policy Institute of Ohio estimates premiums for the average 40-year-old in any Ohio county could rise between 13 and 17% in 2026.
“I can’t really pinpoint a percentage, but it will be going up by $200,” said Palombi.
Palombi said he’s healthy and hasn’t been to the doctor in a while. The increase in price could make keeping health insurance more of a problem than a solution.
Herschman said the increase could force several people to not have health insurance at all.
“It’s called adverse selection,” said Herschman. “So, health care costs become very expensive and unaffordable. A lot of young people and healthy people will go without insurance, and the people that really need insurance will continue to purchase it as if they could afford it.”
Herschman said that going without insurance may sound like a good idea if you can’t afford it but strongly advises against it.
“It’s a tough situation, but I don’t know anybody who could afford to not have insurance and then if they do get sick, they’re financially going to be wiped out,” said Herschman.
Herschman said he advises those who think they may opt out of insurance to get the plan with the highest deductible, read the plan before you select it or find a plan or program that provides help with healthcare.
Herschman knows times are difficult because even he can’t provide health insurance for his employees, but he does offer them advice.
“To the point where I’m just starting to give up,” said Palombi. “I’m looking at all but if anything happened to me, I hope nothing happens but just kind of taking a chance if I don’t get it,” said Palombi.
According to KFF, a health policy organization, when the premium tax credits were added, enrollment in the Marketplace more than doubled. It went from around 11 million to over 24 million people, and many of them receive an enhanced premium tax credit.
If you are enrolled in the ACA marketplace, be sure to check your plan status, your subsidy eligibility, shop around and compare plans and prices.