Either this week or next, the Senate will hold a vote on extending Affordable Care Act subsidies for three years. Premium costs for healthcare have already begun to skyrocket, and if ACA subsidies do not continue, the average net premium cost for individuals will more than double.
Jen is joined by Natasha Murphy, Director of Health Policy at Center for American Progress, to discuss the potential nationwide ramifications if no healthcare plan is reached. Together, Jen and Murphy discuss the perfect storm created by the “Big, Beautiful Bill”, the affordability crisis, and the inability of our federal legislators to come to an agreement on healthcare.
Natasha Murphy is the director of Health Policy at American Progress, where she develops and advances policy proposals to lower health care costs and improve health care coverage, affordability, and quality. Prior to joining American Progress, Murphy served as a public policy and regulatory compliance analyst at CareFirst BlueCross BlueShield.
The following transcript has been edited for formatting purposes.
Jen Rubin
Hi, this is Jen Rubin, editor-in-Chief of The Contrarian. I’m delighted to welcome Natasha Murphy from CAP. She is going to talk to us today about her area of expertise, which is healthcare and the mess we are facing as the affordable care subsidies, are about to expire. Where are we, Natasha, in the process of people having to enroll and make decisions? Are people already signing up for whatever plan they want for next year?
Natasha Murphy
They are, yes. Hi, Jen, thanks so much for having me. Always a pleasure. But as you mentioned, open enrollment for 2026 ACA coverage is already underway. We are more than a month into, you know, the opportunity for millions of Americans to go in there and select what plans that they want to have for next year. And actually, we are quickly quickly approaching on an important deadline. So, December 15th is actually the enrollment deadline for someone to, you know, select their coverage for a January 1st effective date, for ACA coverage. So, I think, you know, we saw a pretty healthy uptick over the Thanksgiving holiday as folks finally had time to, you know, log on to healthcare.gov or their state-based marketplace portal.
And, you know, Americans really are facing some incredibly difficult choices as they plan, shop, and plan select. seeing that their premiums have skyrocketed because, you know, the intense tax credits that have helped, you know, lower those premiums since 2021 will expire at the end of 2025, and it seems like there is no real actionable plan to keep coverage affordable for the millions of Americans who rely on the marketplaces.
Jen Rubin
So, if an average American looks at their existing plan and says, oh my gosh, this is going to go up $10,000 a year, I will take a very high deductible plan, or I just won’t re-enroll. As the law currently stands, there’s no second bite at the apple. They don’t get to change their mind, in January. So Congress would have to do something just to prevent people from being caught in this trap, and not getting to reassess things if, in fact, they ever do anything.
Natasha Murphy
Exactly, yes, you know, the time really is now. This has been a problem, a policy issue that Democrats have been discussing for well over a year. You know, it was obvious that the enhanced premium tax credits did have an expiration date. You know, we had that slated end date of December 31st, 2025, and, you know, Republicans kept pushing the issue, saying, oh, we’ll deal with it, you know, after the one big, beautiful bill fight. We’ll deal with it then, we’ll deal with it. And now, we are honestly at a critical juncture, where you mentioned, you know, Americans are shopping for coverage, they are finding their plans to be unaffordable, and having to make incredibly difficult decisions around trying to, you know, move funds around to try and afford premiums, and for so many Americans, that’s not a reality, and so they will go uninsured.
And like you said. you know, the ACA open enrollment, it’s limited. Unless people have, you know, some type of life change in 2026, so getting married, maybe having a child, they cannot… there is no second bite at the apple. They can’t go back into the platform and say, oh, okay, great, Congress, you finally decided to get your act together. Thanks, now I’m going to select coverage. So, you know, this inaction is really, really going to have, you know, a huge, huge impact on the American population.
Jen Rubin
We hear a couple ideas from Democrats to extend the credits for a couple years, or extend the, Credits for 3 years. Do we have any idea of if there is a Republican plan, if they’re going to present a plan, what that plan might look like?
Natasha Murphy
Yes, honestly, there has been so much swirl, particularly in the past two weeks, about what are the legislative fixes? What are the options? Jen, like you mentioned, Democrats have long called for an extension, and just yesterday, you know, we saw Senator Schumer and others present this three-year extension, for the enhanced tax credits, and, you know, that would honestly be a clean and simple fix. Given where we are in the timeframe, given the absolute need for this to be resolved as quickly as possible, that is honestly the best course forward.
Republicans have been talking a lot about, you know, their supposed plan, you know, how they would redesign the marketplace and shift things, so we’ve heard talks from Senator Cassidy. We’ve heard talks, and actually a proposal from Senator Scott. And, you know, even the White House, just right before Thanksgiving, you know, put a lot of people’s plans a little bit in flux, and had attempted to present their own proposal, which was immediately, you know, kind of scrapped.
But what I’ve seen thus far, to date, from Senate Republicans, it is a health savings account-centric proposal. They want to redirect the existing resources that are currently being used to fund the enhanced tax credits. And pretty much use that for HSAs. basically doing, you know, some type of deposit into HSAs, pushing people into bronze plans or high-deductible plans.
And really, it shows a fundamental misunderstanding of how Americans are experiencing healthcare costs. You know, ultimately, the enhanced premium tax credits help with premiums, those monthly expenses, and HSA deposits they’re, you know, not designed to offset premium costs. And plus, you’re now shifting people into plans that may have lower premiums, but higher deductibles, and that’s, you know, out-of-pocket expenses are another huge area of healthcare costs that Americans are struggling with. So honestly, the Republican proposals that I have seen completely miss the mark.
Jen Rubin
So, with a health spending account, you’re either getting additional money from the government or using your own, salary on a pre-tax basis to use that, and from that, you’re supposed to be able to buy insurance. But the problem was, is that they couldn’t afford it before, and I don’t see how whatever amount they are given could meet the equivalent of what they have now. So, those same people, who maybe even can’t afford to deduct something from their weekly or their monthly paycheck, are getting something that is so insignificant I don’t understand how that would be any better than having no insurance or having a super high deductible plan.
Natasha Murphy
Exactly. You know, it’s gonna really push people into being wholly underinsured. You know, they can’t actually find a way to afford the insurance, they’re not going to use it because they know that they can’t meet any of the out-of-pocket expenses. And like you mentioned, you know, health savings accounts. They serve a purpose, certainly, but, you know, research has shown over the years that it’s really higher-income households that benefit the most from these HSA accounts, because they have the resources, you know, to actually contribute to them in a meaningful way. And the enhanced premium tax credits really were designed to assist lower- and middle-income individuals and families. And so, again, just really, really missing the mark with the Republican proposals that I’ve seen to date.
Jen Rubin
What is your research showing in terms of the number of people who would be priced out entirely from insurance, and even if people could possibly afford it, what the increases are looking for? And I know it varies state to state, but if you could give us kind of a sense of the range of possibilities.
Natasha Murphy
Yeah, so given, you know, the fact that the tax credits are slated to expire in just, you know, a few weeks, the health policy community has been doing months and really years of research on the impacts. And so, you know, the great folks over at KFF that produced some blockbuster analysis earlier this fall that showed that, you know, the average net premium cost for individuals are going to more than double. And so that is… it’s terrifying.
In this broader affordability crisis, when folks are, you know, having to pull resources to afford food, and energy costs, and housing costs—no one can afford to pay more for their healthcare, let alone, you know, a doubling of that amount. And what we’re expecting, the nonpartisan Congressional Budget Office projected that we are going to see, you know, more than 4 million people who are going to become uninsured by 2034 if the enhanced tax credits aren’t extended.
Because the reality is, people just won’t be able to afford coverage and will have to drop coverage altogether. And so I unfortunately anticipate seeing, you know, increases in the number of uninsured Americans. And, you know, for the past few years, we have benefited from this enhanced affordability, and so we’ve seen the uninsured rates drop, and then stay pretty stable, and so it is just heartbreaking to think about, you know, the millions of people across this country who are going to find coverage unaffordable and have to drop it, knowing that their healthcare needs are not going to stop when their current insurance expires.
Jen Rubin
And for people who think they can perhaps, handle this, they’re going to have to make hard choices. Do we buy a house, or do we have health insurance? Am I able to send my kid to college, or do I have health insurance? This seems to be back where we started when Obamacare, as came to be known, the Affordable Care Act first came along. It almost seems like we’re back to that fundamental question.
Natasha Murphy
Yeah, and that is… it is incredibly frustrating to have come so far and made significant strides in, you know, improving coverage, access, and affordability, and now here we are, like you said, very… it’s akin to, you know, the pre-ACA days, where folks are having to make those exceptionally difficult choices, about, you know, giving up other incredibly important, you know, life milestones and other things for survival just to be able to afford healthcare.
Jen Rubin
So, if there is no, resolution, Republicans either don’t have a proposal or put up something that’s completely unfeasible. Is there any opportunity to come back next year? Can they undo the damage if there is a great public explosion of, criticism?
Natasha Murphy
Yeah, honestly, Jen, I am not confident. I feel like, you know, really, we are approaching that point where if action is not taken, the damage will be done. And I think some of it is just given human behavior. Folks log into the portal, they see, I can’t afford, you know, an $1,800 a month premium, that’s… that’s it for me. And, you know, despite public outcry, you know, despite any attempts at legislative change, I think once people see that, they’re automatically just going to, you know, kind of stay out of the process.
And so, you know, that is just an incredibly frustrating element of, you know, I think kind of the political cycle. And I will say, one of the things that I think folks are also concerned about as people become to find that their marketplace coverage is unaffordable, you know, more and more, you might have some of the non-compliant ACA plans becoming a bit more attractive, you know, so these short-term limited-duration plans, or association health plans, which honestly, you know, provide subpar coverage because they can exclude things like mental health, or even maternity care.
But, you know, if people are looking for some type of coverage option, they might be drawn in by these plans’ incredibly low premiums. And so, you know, for folks who may not go insured, but find themselves in these non-ACA compliant and honestly, you know, insufficient plans. I, you know, shudder to think about, you know, those folks who are going to be exposed to, you know, a lot of financial insecurity, or just, you know, unexpected expenses in 2026 and beyond.
Jen Rubin
Final question. This comes at a time that there’s another tremendous hit coming to the healthcare system, and that is sucking out about a trillion dollars from the Medicaid system that, as we know, is the lifeline for many rural hospitals. So, as these two things come together, what does that do to even people who have private insurance? In other words, what happens when you got a bunch of sick, uninsured people, who are now going to emergency rooms or are getting unreimbursed care? What happens to an employee who gets benefits from their employer?
Natasha Murphy
Yes, great, great question, Jen. Yes, we are kind of in this perfect storm of these dual, both affordability and now coverage threats as we stare down, you know, the Medicaid changes and the historic cuts that were included in the reconciliation bill. And like you said, they do not just stay kind of confined to the market segments of the ACA and Medicaid. They are going to have entire systemic impacts on the broader healthcare system.
So, using rural hospitals and rural health systems. as people lose coverage, like I mentioned, their healthcare needs don’t stop, and so they are still going to have to seek care somewhere, and oftentimes that is going to mean, you know, going to the ER when things are worse than they could have been or would have been if they were able to see, you know, an actual physician in a more timely manner. But they don’t have insurance to pay for it, and so we’re going to see ,you know, unreimbursed care skyrocket.
And for so many rural hospitals in particular, who are already on the brink and trying to balance out their finances and their books, they are not going to be able to shoulder the burden of all of this uncompensated care. And so, you know, I anticipate seeing closure of probably starting with, you know, particular lines of business. So, in the past, we’ve seen instances where they closed maternity and labor and delivery. You know, the wards that are not necessarily turning the highest profit. And then, you know, we could also see entire closures of hospital systems, and of course, that impacts entire communities.
So whether you are getting your coverage through your employer or, you know, formerly through Medicaid, if there is no hospital or healthcare provider in your region, that means much longer drive times to see a doctor, longer wait times to even get appointments. And so, it is going to have a huge burden, both on individuals, but providers and healthcare systems as a whole.
Jen Rubin
Well, and I would just remind folks out there that the people who are arguably the worst impacted are people in red states, because those people disproportionately have rural healthcare systems, and disproportionately use the Affordable Care credits. So if you look at the map. It’s like a map of Red America, when you look at the highest impact on those states.
Thank you so much, Natasha, for all your expertise. We’ll continue to follow this, and we’re going to continue to follow what the fallout was going to be, and what it looks like next year, when people wake up and they find they don’t have healthcare insurance, which is really a human tragedy. So, thank you so much for joining us. We’ll look forward to having you back.
Natasha Murphy
Thanks so much, Jen.
