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The Impact of Expiring Subsidies on Consumers

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The Patient Protection and Affordable Care Act, also known as Obamacare, that was originally signed into effect in 2010 is under extreme scrutiny today as millions of participants dread the upcoming increase in premiums.

History of the Law

            The Affordable Care Act (ACA) was the idea of Nancy Pelosi and other Democrats in the House of Representatives dating back to 2009. There have been significant changes to the Act since then, including the addition of subsidies for monthly healthcare premiums, which was introduced in 2014. These subsidies were designed to give poverty-level individuals a break by lowering their out-of-pocket monthly costs.

            In 2020, the Act was extended to middle-income Americans for the first time, and additional relief was given to those already receiving subsidies. These additional financial assistance programs were granted in response to the Coronavirus Pandemic and its associated impacts on the population’s ability to find and maintain work. However, the provisions that allowed for this additional help are due to run out at the end of this year.

Impact on Participants

            If Congress lets these provisions run their course without taking action to adjust or reestablish the financial assistance, millions of Americans are set to see a hike in their monthly insurance premiums. It is estimated that payments could rise as much as 53% for some. These hikes could also result in numerous Americans electing to discard their coverage completely. The loss of these subsidies also comes at a time when interest rates are on the rise and gas prices are double or triple what they were just a year prior, making the financial burden on Americans even greater.

            There are discussions in Congress already about next steps and what to do with the ACA moving forward. Since its inception in 2010, the ACA has been a touchy subject as people either love or hate the law. Regardless of feelings surrounding the subject, action of some kind will be taken to either extend the tax credits once again or allow them to run their course. It is important for Americans to be aware of such impending changes and to understand the impact of both possibilities on monthly insurance premiums in the future.

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