The ongoing federal government shutdown has now stretched into its second month, with Democrats insisting on extending tax credits that help individuals afford health care through the Affordable Care Act (ACA) marketplace. As open enrollment for Obamacare plans begins this week, Arizonans who depend on this coverage are closely monitoring potential cost increases if the current subsidies expire by year-end.
Currently, over 400,000 Arizona residents obtain health insurance through the ACA marketplace, and approximately 90% benefit from enhanced premium tax credits that significantly reduce their expenses. According to KFF, a health policy research group, without these credits, the average cost for coverage could surge by about 114%.
Phoenix resident Sue Hutchison and her family, who are enrolled in an ACA marketplace plan after her husband’s retirement, face a challenging scenario. They are ineligible for Medicare and earn too much for Medicaid. Currently, they pay just under $500 monthly for insurance that covers the couple and two sons, but Hutchison noted that next year this plan might increase to $1,400 monthly, which would account for more than a quarter of their income.
“We’re not happy,” Hutchison expressed. “We’re probably going to suck it up because I’ve had some fairly major health things happen this year and I don’t think we want to go without.”
Steve Gomez from Gilbert, who is self-employed, also depends on the ACA marketplace due to his son’s medical conditions, including a heart transplant and epilepsy. Gomez’s family will lose their current plan next year, an outcome he described as “just sucker punch after sucker punch.”
Gomez has been paying over $3,000 monthly for health coverage, opting to claim enhanced premium tax credits annually through taxes rather than reducing monthly costs. If these subsidies are not renewed, the tax savings will vanish. While the new plan he considers for next year might be slightly cheaper monthly, it comes with significant drawbacks.
“It’s a massively higher deductible — at $9,600 — and none of my son’s doctors are covered,” Gomez said.
A recent KFF poll revealed that 78% of Americans support the continuation of these tax credits, including nearly 60% of Republicans and over 90% of Democrats. Arizona Democrats, like Sen. Mark Kelly, are advocating for the extension of ACA subsidies.
“Donald Trump and Congressional Republicans have the power to stop these costs from going up,” Kelly stated. “They can work with us to extend these tax credits.”
The Congressional Budget Office estimates that extending the subsidies would cost the United States $350 billion over a decade. Arizona Republicans, including Rep. Andy Biggs, argue that these credits were a temporary measure related to COVID-19 relief and are financially unsustainable.
“You’re talking about the subsidy that came in for COVID relief,” Biggs remarked to Arizona’s Family.
Both Hutchison and Gomez are considering delaying their health plan enrollment in hopes that a bipartisan agreement on the tax credits might emerge.
“I’m just watching the news, waiting and keeping my fingers crossed,” Hutchison commented.
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