ACA Subsidy Extension Vote Raises Uncertainty for Enrollees as Open Enrollment Nears End

Democratic lawmakers, as part of efforts to end the longest recorded government shutdown that began October 1 and ended November 12, negotiated a vote on extending the Affordable Care Act (ACA) subsidies for 3 years, with a decision expected later this week.1,2 The upcoming vote leaves subsidy-eligible enrollees facing uncertainty about whether premiums will rise and what alternatives may be available as open enrollment nears its close.3

Senate members will vote on the Restoring Patient Protections and Affordability Act, introduced by senators Lisa Blunt Rochester (D, Delaware) and Ron Wyden (D, Oregon). The legislation would effectively renew the ACA subsidies for 3 years, extend the 2026 open enrollment period, lower out-of-pocket caps, and potentially stop premiums from increasing.1 Should the subsidies expire, experts predict premiums to increase, more people to go uninsured, and strains on economically disadvantaged populations, rural hospitals, and safety-net providers.4 Many people will be forced to explore their options from before the enhanced ACA subsidies, many of which are unaffordable and offer limited coverage, said Ciara Zachary, PhD, an assistant professor in the department of health policy and management at the UNC Gillings School of Global Public Health.

“[They might be] seeking that free care, seeking care on sliding scales, looking for those community health centers that might have lower costs,” Zachary said in an interview with The American Journal of Managed Care® (AJMC®). “Maybe some folks will buy skimpy health plans, or those catastrophic health plans, which are not comprehensive… It may not cover [what they need], or [it might have] a high deductible. I just think people who need care are going to try to cobble together care.”

ACA subsidy extension efforts highlight consumer uncertainty, rising premiums, and coverage alternatives as policymakers debate the future of health care affordability. | Image credit: Yauhen - stock.adobe.com

What Expiring Subsidies Mean for Consumers, Employers, and Hospitals

If the ACA subsidies expire, eligibility criteria will revert to those used before the American Rescue Plan Act and Inflation Reduction Act. This legislation capped premiums at 8.5% of household income for those making 400% or less of the Federal Poverty Line (FPL). Reverting the criteria would increase benchmarks to 9.9% of household income for those making 300% and 400% of the FPL.5 The Congressional Budget Office (CBO) predicts nearly 4 million people will lose their coverage.4

“[For some], going uncovered is going to be even more expensive,” said Ben Light, vice president of partnerships at Zorro—an AI-powered individual coverage health reimbursement arrangement (ICHRA) platform for personalized benefits—and expert in consumer-directed health benefits, in an interview with AJMC®. “And probably expensive in the way that it means they will forego treatment or forego medications, which means they'll get sicker and sicker, and then by the time they actually show up in an emergency room, they're really in trouble.”

Emergency departments, hospitals, and community providers may experience increased uncompensated care burdens. People predicted to forego insurance are likely to turn to safety-net hospitals or rural facilities that are already operating with narrow margins.4

“That means that more folks are going to present in hospitals who are in need of emergency care but who are unable to pay, which manifests as uncompensated care costs that are borne by hospitals,” said William Schpero, assistant professor at Weill Cornell Medicine Graduate School of Medical Sciences, in an interview with AJMC®. “This is yet another potential hit to operating margins for hospitals.”

These hospitals would then be forced to scale back services, thus further limiting access to underserved communities.4

Aside from going uninsured, Light also predicts many people will turn to their employers to subsidize their loss of coverage. But employers may also see an increase in renewals, leading industries and groups to seek alternative benefit packages for employees in a competitive labor market.5

“Providers have effectively become subprime lenders, shouldering much of the risk for care before deductibles are met,” Light explained in a written interview with AJMC®. “When they aren't compensated fully, that cost has to be absorbed somewhere—and often, it ends up being passed on to employers, either immediately or at renewal.”

Health Care Coverage Alternatives to the ACA Subsidies

Should the ACA subsidies expire, here are a few health care coverage alternatives:

Employer-Sponsored Insurance

Employer-sponsored insurance premiums will continue to rise if the enhanced subsidies aren’t extended. In 2025, health insurance costs increased by 6.0%, amounting to $17,496 per employee, according to Mercer’s national survey of employer-sponsored health plans.5

“Now that [ACA subsidies] are going away, [people are] going to look back to their employer and say, ‘I either need health insurance or maybe I'm going to have to find another job,” Light said.

ICHRAs

Although ICHRAs may offer some relief for employers and consumers, as they allow employers to customize reimbursement based on index plans and employees to choose a marketplace plan that caters to their health needs.5

Employees can choose from ACA-compliant market coverage insurance, pay their premiums up-front, and are then reimbursed by their employer, depending on the budget the said employer has set. However, this option is biased towards those who can afford to pay premiums up front. But some ICHRA providers manage reimbursements directly to the insurance providers and then deduct premiums from payroll, like a standard health care plan.5

Short-term, Limited-Duration Insurance

Short-term, limited-duration insurance (STLDI) and independent, noncoordinated excepted benefits coverage are designed to sustain individuals through lapses in health care coverage, such as transitioning between employer health coverage plans.6

While they may offer temporary relief for immediate medical needs, there are strict limitations on who is eligible, as they are not subject to the same federal individual market consumer protections for comprehensive care. The fixed cash benefit can be used as needed for out-of-pocket expenses or to cover non-medical expenses. Payments can be made per period of hospitalization or illness or per service. Although the initial contract can be no longer than 3 or 4 months, accounting for renewals or extensions.6

Health Care Sharing Ministries

Health care sharing ministries (HCSM) operate similarly to individual health care plans, in that people—typically sharing similar religious beliefs—make monthly payments to cover expenses of other members or themselves. However, HCSMs are not consumer-protected or regulated by the ACA.7

While some members may benefit from HCSM, it poses a risk for other members, as there is no guarantee for payment of claims, and it provides limited benefits.7

What’s Next for the Future of Health Care Coverage?

Despite the uncertain future of the subsidies, Light said he thinks the situation will give people a reason to be more intentional about their health.

“I hope employers continue to encourage that,” he said. “And in some cases, support it through health savings account contributions or saying to an employee, 'Yes, I'm going to provide you coverage, but I'll also make sure you have the dollars to be able to handle whatever out-of-pocket expenses come to you.’"

Senator Blunt Rochester continues to advocate for the Restoring Patient Protections and Affordability Act to make sure the American people can afford the most basic right of affordable health care.

“The cost of living is skyrocketing, and the last thing hardworking Americans need is another bill added to their everyday expenses,” she said in a press release.1

References

1. News: Senators Blunt Rochester, Wyden introduce legislation to protect patients, ensure more Americans can afford health care. Lisa Blunt Rochester. December 4, 2025. Accessed December 9, 2025. https://www.bluntrochester.senate.gov/news/press-releases/news-senators-blunt-rochester-wyden-introduce-legislation-to-protect-patients-ensure-more-americans-can-afford-health-care/

2. Bonavitacola J. Government shutdown concluded but ACA subsidies in limbo. AJMC. November 13, 2025. Accessed December 9, 2025. https://www.ajmc.com/view/government-shutdown-concluded-but-aca-subsidies-in-limbo

3. Parks M, Garrett L. A deadline approaches as ACA subsidies hang in the balance. NPR. December 7, 2025. Accessed December 9, 2025. https://www.npr.org/2025/12/07/nx-s1-5636638/a-deadline-approaches-as-aca-subsidies-hang-in-the-balance

4. Steinzor P. 5 consequences if ACA premium subsidies end in 2026. AJMC. October 31, 2025. Accessed December 9, 2025. https://www.ajmc.com/view/5-consequences-if-aca-premium-subsidies-end-in-2026

5. McCrear S. Expiring ACA subsidies and CMS payment models raise costs for consumers and employers. AJMC. November 25, 2025. Accessed December 9, 2025. https://www.ajmc.com/view/expiring-aca-subsidies-and-cms-payment-models-raise-costs-for-consumers-and-employers

6. Short-term, limited-duration insurance and independent, noncoordinated excepted benefits coverage (CMS-9904-F) fact sheet. CMS.gov. March 28, 2024. Accessed December 9, 2025. https://www.cms.gov/newsroom/fact-sheets/short-term-limited-duration-insurance-and-independent-noncoordinated-excepted-benefits-coverage-cms

7. Volk J, Curran E, Giovannelli J. Health care sharing ministries: what are the risks to consumers and insurance markets? Commonwealth Fund Issue Brief. August 2018. Accessed December 9, 2025. https://www.commonwealthfund.org/sites/default/files/2018-08/Volk_hlt_care_sharing_ministries.pdf