A new analysis from the Congressional Budget Office (CBO) indicates that over 3.5 million Americans could lose their health insurance if Congress fails to extend enhanced tax credits for Obamacare premiums. The CBO’s report, released Thursday at the request of congressional Democrats, projects that making these subsidies permanent would increase the number of insured individuals by 3.6 million by 2030 and 3.8 million by 2035, while also lowering average premiums for Obamacare marketplace plans by 7.6% over the next decade.
However, extending the expanded subsidies would come at a cost of $350 billion to the Treasury over ten years. This financial burden presents a challenge for Republican leaders, who must navigate the concerns of fiscal conservatives while addressing the interests of more centrist party members.
The tax credits were introduced by former President Joe Biden and congressional Democrats in 2021 and were extended in 2022 as part of COVID-19 relief efforts. They are set to expire at the end of 2025.
Currently, approximately 24 million Americans obtain their health insurance through the Obamacare marketplace, with over 22 million qualifying for the enhanced premium subsidies. According to KFF, about half of all adults under 65 with marketplace coverage either work for small businesses or are self-employed.
As insurers prepare to increase premium rates next year, a KFF report indicates an average projected premium hike of about 18% for 2026. If the subsidies expire, individuals could face an average increase of 75% in their premiums.
Democrats are prioritizing healthcare concessions, including the extension of premium subsidies, as they oppose the Republican-led continuing resolution to fund the federal government for the rest of the year. The deadline for reaching a deal is September 30, just a month before health insurance open enrollment begins.
House Minority Leader Hakeem Jeffries (D-NY) and Senate Minority Leader Chuck Schumer (D-NY) stated that the Republican continuing resolution plan “does nothing to stop the looming healthcare crisis.” They emphasized that families are already struggling with rising costs and criticized Republicans for not preventing double-digit hikes in health insurance premiums.
Even if the GOP manages to maintain the current level of premium subsidies during the budget negotiations, failing to extend the tax credits may pose a risk for their re-election efforts in the 2026 midterms. Polls conducted by Trumpworld pollsters Tony Fabrizio and Bob Ward in February indicated that as many as 78% of swing voters in key House districts supported extending the tax credits. Similar findings from a July poll suggested that Republicans backing the tax credits could gain a six-point advantage over Democrats.
EXTENDING OBAMACARE TAX CREDITS WON’T FIX HEALTHCARE COSTS
Chris Pope, a health policy expert at the Manhattan Institute, remarked to the Washington Examiner that the expiring subsidies are “politically a much bigger deal” compared to the healthcare discussions surrounding Medicaid policy changes in the One Big Beautiful Bill Act this summer. He noted, “These subsidies are very big, and they would have an immediate impact, and so I think there’s going to be a real desire to not get caught on the wrong side of it, politically, from Republicans.”
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