On Nov. 1, Michelle Higgs plans to check the Affordable Care Act health insurance marketplace portal and see how much more she will pay next year if Congress fails to extend enhanced subsidies.
She estimates that her current plan, which also covers her husband and two young children, would increase by more than $2,000 per month without subsidies. But that’s before factoring in insurance companies’ annual premium hike, which is the steepest nationally since 2018.
“The reality is…we’re not going to be able to afford that,” said Higgs, who lives north of Unionville. She suspects her family will have to switch to a catastrophic plan that only covers emergencies in exchange for lower premiums. Still, she won’t know the exact cost until she and the more than 300,000 Hoosiers enrolled in the marketplace check the portal on the first of the month.
Ultimately, Indiana enrollees who qualify for enhanced subsidies will see premium payments 82% higher than what they paid last year, according to the health policy research nonprofit KFF, if Congress does not extend them.
In such a scenario, around a fifth of current marketplace enrollees in Indiana would become uninsured by 2034. Indiana is one of 13 states that would see the highest percentage of enrollees lose health insurance.
Higgs, who founded Indiana Rural Summit, works as an organizer and is running for the state legislature while her husband is a self-employed consultant, putting them in one of several buckets of Americans — think barbers, small business owners or Uber drivers — who purchase health insurance rather than getting it through an employer. Though there are ways to buy health insurance outside of the marketplace, it’s an attractive option for people because it offers subsidies, or tax credits, that can offset the cost.
The looming deadline threatens to balloon health care costs for all Americans. That’s because insurance companies have assumed Congress will not extend the subsidies and are anticipating mass unenrollment. Higher premiums offer a way for insurance companies to keep profit margins stable as more people become uninsured.
The crisis is at the heart of the government shutdown, which is approaching the longest in American history. Extending the subsidies that expanded under President Joe Biden is one of Democrats’ demands in exchange for voting to reopen the government, but Republicans have said extended subsidies don’t belong in a spending bill.
The higher premiums would threaten to topple an already precarious social safety net for low-income Hoosiers. The U.S. Department of Agriculture informed states in October there were insufficient funds for November food stamps because of the government shutdown and declined to use contingency money. Meanwhile, food pantries are facing record demand as furloughed federal employees look for ways to get by without a paycheck, worsening a trend of rising need this year.
The impending sticker shock of higher premiums has even hit the small southern Indiana nonprofit Hoosier Action, said organizer Tracey Hutchings-Goetz. Its insurance broker quoted the nonprofit a 50% increase.
“Nobody feels safe right now from escalating health care costs,” she said.
How did we get here?
Health care and its costs are complicated. No one seems to have a simple solution to the problem.
But part of that, said Kosali Simon, an IU professor and health economist, may be because people are asking the wrong question.
For decades, politicians have offered different visions of health care policy that address the question of who pays, but not why it’s so expensive in the first place.
“This is the $4 trillion question,” Simon said.
It’s a question President Donald Trump seems to want his party to answer with a major health care overhaul, according to Politico, but no grand plan has been revealed.
Trump has also expressed an openness to extending subsidies, even though many within the Republican Party oppose it. Critics believe the expansion of subsidies has led to increased fraud and would rather work toward a solution that convinces insurers to lower premiums rather than shifting the cost onto government. Some see the entire framework as bad policy, where an extension of subsidies would only solidify the program.
But failing to extend the subsidies could have political consequences for Republicans because most marketplace enrollees live in Republican districts.
Advocates said people who couldn’t afford higher premiums would have few options. They will likely either go uninsured or take a pay cut to qualify for Medicaid, Hutchings-Goetz said.
But those who go uninsured, even among the young and healthy, are only one accident away from a lifetime of medical debt, she warned.
Rural hospital woes
Marketplace enrollees are not the only group who stand to suffer from expired subsidies.
Rural hospitals already operating on thin margins would likely have to provide more free emergency care as thousands of Hoosiers lose health insurance.
“If you don’t have insurance,” said Justin Harris, CEO of Daviess Community Hospital, “we don’t get paid.”
The struggle for Daviess Community Hospital, located in the southern third of Indiana in Washington, is a combination of serving a population where most people are on Medicaid or Medicare and the cost of getting supplies delivered to a rural area.
Since the government reimburses hospitals at a lower rate than private insurance, Harris said, rural hospitals must serve more patients to make the same amount of money as bigger hospitals.
“If the government is unable to reimburse us at some rate that is affordable,” he said, “then it’s hard for us to continue operations, as with any hospital in Indiana and across the nation.”
That problem is set to worsen in the coming years. Soon, the cuts to Medicaid included in the One Big Beautiful Bill Act will take effect, which could threaten some of the specialized services the hospital offers.
Private insurance could also provide better reimbursement rates, Harris said, especially after several years of stable profit margins that peaked in 2020. But health insurance companies saw a dramatic drop in net income and profit in 2024, citing rising medical costs, higher health care utilization and the popularity of expensive GLP-1 drugs.
Though the cost of care from providers across the country may be rising, Daviess Community Hospital is far from getting rich.
“We’re not asking to gouge the government,” he said. “We are really just asking to get closer to break-even.”
How much will I be paying in 2026?
Marketplace enrollees will be paying higher premiums come January, even if the subsidies are extended.
That’s because insurers anticipated Congress would not extend the subsidies and built that calculation into their requests. Indiana approved an average rate hike of 26% for individual marketplace plans, according to the Department of Insurance — higher than the national increase, but a bit lower than insurance companies wanted.
Hoosiers who get insurance through their employer may also feel the crunch if subsidies expire. A combination of rising costs and a lower profit margin for insurance companies in 2024 may encourage them to raise their rates across the board, which employers are likely to pass onto employees.
But the financial hits Americans may face next year are more than simple cost-adjustments, Hutchings-Goetz said, and are instead the result of a profit-seeking system and chaos in Congress.
Meanwhile, the larger question of how to provide affordable health care, and what lawmakers are willing to sacrifice for it, remains.
“What’s the tradeoff?” Simon said. “What else is it that society might not get?
Contact Marissa Meador at mmeador@gannett.com or find her on X at @marissa_meador.
