At least 3.5 million more people will lose health insurance coverage if Congress does not extend the added Obamacare premium subsidy tax credits, according to a new analysis from the Congressional Budget Office.
The CBO, Congress’s nonpartisan group of budget experts, said Thursday in a new analysis requested by congressional Democrats that permanently extending the extra subsidies would raise the number of people with health insurance by 3.6 million by 2030 and 3.8 million by 2035. Premiums for Obamacare marketplace plans would also be lower by 7.6% on average over the next decade.
Renewing the expanded subsidies, though, would cost the Treasury $350 billion over the decade. The price tag illustrates the difficulty Republican leaders face in getting fiscal conservatives to support any extension of subsidies, as favored by some more centrist members of the party. Meanwhile, Democrats are putting pressure on the GOP over the looming expiration of the credits at the end of the year.
The tax credits were enacted by former President Joe Biden and congressional Democrats in 2021 and extended in 2022 as part of relief efforts during the height of the COVID-19 pandemic.
“American families are about to have health care sticker shock unless Republicans start working with Democrats to avert a health care catastrophe,” Sen. Ron Wyden (D-OR), the top Democrat on the Finance Committee, said in a statement. “The cost of inaction outlined in this analysis is a stark contrast with Republican leaders’ complete lack of urgency to stop the premium spikes and coverage loss facing millions of Americans.”
About 24 million people get their health insurance through Obamacare marketplace exchanges, with more than 22 million of those patients qualifying for enhanced premium subsidies.
Roughly half of all adults under age 65 with Obamacare marketplace coverage are employed by a small business or are self-employed, according to the healthcare policy organization KFF.
Patients are likely to take an even tougher blow as insurers increase their premium rates next year. A report from the health policy organization KFF, which supports expanding the subsidies, found that Obamacare insurers are planning an average premium increase of about 18% for 2026.
Combined with the expiring subsidies, that means people could be paying an average of 75% more in premiums next year.
Democrats have made securing healthcare concessions, including extending the premium subsidies, a pillar of their approach to negotiating with Republicans over legislation to fund the federal government for the rest of the year.
The deadline to reach a deal on a government funding bill is Sept. 30, just one month before health insurance open enrollment begins on the Obamacare exchanges and the employer-sponsored insurance market.
House Minority Leader Hakeem Jeffries (D-NY) and Senate Minority Leader Chuck Schumer (D-NY) said in a joint statement Monday that the Republican continuing resolution plan “does nothing to stop the looming healthcare crisis.”
Even if the GOP is able to hold the line on premium subsidies during the continuing resolution fight, not extending the tax credits will likely be a reelection liability come the 2026 midterm elections next fall.
In February, Trumpworld pollsters Tony Fabrizio and Bob Ward found that as many as 78% of swing voters in key House districts supported extending the Obamacare tax credits.
Another poll from Fabrizio and Ward in July had similar results, finding that Republicans who supported the tax credits could gain a 6-point advantage over Democrats.
EXTENDING OBAMACARE TAX CREDITS WON’T FIX HEALTHCARE COSTS
Chris Pope, health policy expert for the Manhattan Institute, previously told the Washington Examiner that the expiring subsidies are “politically a much bigger deal” than the healthcare fights over Medicaid policy passed in the One Big Beautiful Bill Act this summer.
“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,” Pope said.
In its report Thursday, the CBO also analyzed the effects of repealing parts of the OBBBA that applied to the Obamacare exchanges. It found that undoing the changes, which include measures meant to prevent subsidies from going to illegal immigrants, would increase the number of people with insurance by 2.9 million over the next decade, but cost $271.9 billion.
