Open Enrollment Comes with Challenges in 2025 

As it has each year, open enrollment in the health insurance Exchanges started at the beginning of November – but this year it was amidst ongoing challenges in the commercial insurance market. Those searching for coverage across the country are faced with higher premiums and many individuals who are currently receiving financial assistance in the form of advance premium tax credits (APTC) face losing eligibility or lower support. All of this is expected to have ripple effects on the stability of commercial insurance markets and providers across the country. 

Premiums across the country have increased an average of 26% for the 2026 coverage year. The proposed median rate increase across the country was more than double last year. As a result, one survey found that nearly half of Americans now worry about being able to afford health care.  

At the same time that costs are going up steeply, fewer people are poised to get assistance with the cost of coverage starting in 2026; and many of those who will continue getting support will get less. As we reported earlier this fall, without Congressional action, the enhanced APTCs that were authorized under the American Rescue Plan Act and extended under the Inflation Reduction Act will expire at the end of 2025. While the enhanced APTCs were at the center of the federal government shutdown, it ended without direct action on the subsidies, and most people hold out little hope for progress through a promised vote later this year. As a result, the subsidy “cliff” will return – meaning that those individuals who earn 399% or less of the federal poverty level (FPL) have their cost of coverage limited to an amount deemed affordable based on their income, while those with incomes over 400% of the FPL – currently $58,320 for an individual – get no assistance regardless of the cost of coverage compared to their income. That cliff is particularly concerning for older adults who face higher cost for coverage. Additionally, those under 400% FPL who continue getting assistance will get less as the standard for affordability increases. 

As a result, those shopping for coverage now have choices to make. Will they wait to make a coverage decision pending a future vote on the enhanced APTCs or make that decision now? If the answer is now, will they find a way to keep the same level of coverage, “buy down” for less robust coverage (and as a result face possible barriers to care due to unaffordable cost sharing), or will they take the risk of going without coverage completely? Those last two scenarios certainly put individuals at risk of going without needed health care and long-term health consequences. They also stand to have ripple effects for the market; healthier people buying less rich coverage or no coverage at all raises the “risk profile” of more comprehensive coverage, making that coverage even more expensive and less attainable. This ultimately impacts the stability of state commercial health insurance markets. At the same time, providers face treating patients with higher cost sharing or no coverage and who may not be able to pay those costs.