Chrysa Ostenso expects to pull money from her 401k to pay for the $1,500-a-month health insurance she'll get next year when the Affordable Care Act enhanced tax credits end.
She and her husband operated his optometry practice in rural Wisconsin for 35 years before he died a few months ago. With the tax credits, they paid as much as $500 for insurance. Before the tax credits were created in 2021 to help more people get insurance during the pandemic, the cost was closer to $2,000 a month.
Now, as Ostenso works to wind down and sell the business without him, she got a letter notifying her that without the enhanced credit, a plan covering just her will cost $1,500 a month and come with a $7,200 deductible.
"It's insane," she told USA TODAY. "Nothing else has gone up that much in cost."
Roughly 22 million Americans receive the enhanced subsidies, which lower the cost of their ACA insurance premiums. The subsidies will expire at the end of the year unless Congress acts to put them back in place. If lawmakers don't follow through, the average recipient would see premiums for their insurance plan more than double in 2026, according to KFF, a nonpartisan health policy research group.
About half of recipients are people like Ostenso, who run or work for small businesses or are self-employed,according to KFF.
Open enrollment closes in mid-January, but consumers have to make decisions by Dec. 15 forcoverage to start at the beginning of the year, leaving scarce time for Congress to act.
On Dec. 11, the Senate will vote on a Democratic proposal to extend the expiring tax credits for three years. It would need Republican support to hit the 60 vote threshold to avoid a filibuster and is expected to fail.
Republicans will also vote on their own health care plan that does not extend the enhanced tax credits at all. Instead it would deposit$1,000 to $1,500 into health savings accountsfor eligible consumers purchasing plans through the marketplace.
Congress passes deal to end longest government shutdown in US history
A vote on the Democratic plan wasa promise Republicans madeto a handful of their Democratic colleagues in exchange for their support in November to bring an end to thelongest-ever government shutdown, which occurred in part because the tax credits were expiring at the end of the year.
The big picture for Obamacare
The health insurance marketplaces were created as part of the Affordable Care Act of 2010, often called Obamacare, as a way for people who didn't have access to Medicaid or employee sponsored insurance to pick from a variety of quality health plans. The marketplace also provided financial assistance, such as tax credits and cost-sharing reductions, based on users income.
The idea: More people participating would drive down overall costs through market competition the same way that an employer-based plan can negotiate lower prices because so many people participate.
Democrats have long promoted the idea that the Affordable Care Act gives people more freedom to start a business or become an entrepreneur without worrying about losing health insurance. But marketplace plans weren't very affordable for middle-income people who didn't qualify for the original tax credits.
Then-PresidentJoe Bidensigned the expansion of the tax credits in 2021, which led torecord enrollmentand historically low uninsured rates, according to KFF.
"It's really consequential" if the enhanced credits end, said Katherine Hempstead, senior policy officer at the Robert Wood Johnson Foundation, a nonprofit that focuses on health. "Over the last couple of years, the importance of the marketplace to small business and to self-employed folks has really been growing."
In total, nearly one in five of the nation's small business owners and self-employed workers ages 21-64 relied on the Affordable Care Act Marketplaces for coverage in 2022, the most recently available data from the Treasury Department.
Hempstead expects ripples through the economy as people decide to close their businesses because health care is too expensive, or choose not to open one.
"I don't think that people talk enough about the mainstream Main Street implications of this and what this means for job creation and other kinds of things that are important and have benefits that ripple out into the economic well-being of a community," she said.
Andrew Volk, 42, of Portland, Maine said access to affordable health insurance through the marketplace meant he was comfortable taking the risk and opening his own cocktail bar 12 years ago. Having that security paid off when his daughter had a complicated birth a year later.
"My business would not exist without the ACA," he said. It's a refrain he's heard from other entrepreneurs and he's concerned that others wont be able to follow their passions without the enhanced tax credits.
"It's going to be a drag on the economy for years to come," Volk said.
Tax credits meant to be temporary, GOP says
Congress initially created the enhanced tax credits in 2021 to ensure Americans could afford health coverage amid the COVID-19 pandemic, and people flocked to use them.
The number of people purchasing insurance through the marketplace has more than doubled since 2020. The majority of users are in states that voted for Trump in 2024, like Florida, Georgia and Texas,according to KFF.
About 92% of the 24.3 million Americans who use the marketplace receive a subsidy of some amount,according to KFF. If Congress doesn't act and the credits expire at the end of 2025, out-of-pocket premiums would rise by more than 75% on average.
The enhanced tax credits increased subsidies that eligible people received, and expanded eligibility to include those making more than four times the federal poverty level. In2025, that figure is$62,600 for an individual or $124,800 for a family of four.
More:These people have found their health care at the center of a shutdown showdown
The Congressional Budget Office estimates that 4.2 million more people will be uninsured by 2034 if the enhanced credits end. Expanding the premium tax credits would cost nearly $350 billion over the next decade, according to aCongressional Budget Office review.
As many as 22 million Americans on ACA plans could see their monthly health insurance premiums jump 114% without the enhanced tax credits,according to KFF.
Republicans argue that the government shouldn't be subsidizing health insurance for millions of citizens, and that the enhanced tax credits weren't intended to be permanent. Democrats are prepared to lambast Republicans in the midterm elections for overseeing a spike in health insurance costs for poor and middle class Americans.
Back to corporate work
For years, Steve Gomez, 44, of Gilbert, Arizona ran his own project management business while his wife worked a job where they had access to employee sponsored benefits.
"The deal was I make the money, she makes the benefits," he told USA TODAY.
It was particularly beneficial when their son Anthony needed a heart transplant six weeks after he was born. Between the extended hospital stay and the surgery, the cost without insurance would have been in the multi-millions of dollars.
In the years since, his wife joined him in working for herself, a move that gives them flexibility to deal with kids schedules and be available for now 10-year-old Anthony's medical needs. But whether it makes sense for her to go back to a more rigid company-based job for benefits is "at the back of our minds."
The $2,900 Gold Plan offered by Blue Cross BlueShield in Arizona next year no longer allows them to have a Health Savings Account and moves all of Anthony's doctors, including the only pediatric cardiologists in the Southwest, out of network, he said.
That means the family will have to shoulder greater costs of massive medical expenses, including the annual catheterization to monitor the functionality of Anthony's heart scheduled for Jan. 7.
Ostenso, the 62-year-old Wisconsin resident, has considered finding a job just for the insurance benefits until she qualifies for Medicare at 65. But the idea isn't sitting well with her.
"I'm not that crazy about the idea of signing up to punch a clock 40 hours a week after being self employed my whole life," she said.
This article originally appeared on USA TODAY:ACA tax credits ending has business owners worrying over 'insane' costs
