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Expiring Biden-era enhanced Obamacare credits minimally impacted total 2026 premiums, countering a Democrat narrative that the expiration of these credits is responsible for health insurance price increases. Democrats have shut down the government over the looming expiration of the Biden-era enhanced Obamacare credits. The credits were first enhanced under President Joe Biden’s $1.9 trillion, coronavirus-era stimulus plan, the American Rescue Plan. Democrats then temporarily extended these credits under the so-called Inflation Reduction Act. According to the Paragon Health Institute, 2026 benchmark rate filings have revealed that the expiration of Biden coronavirus-era credits “accounts for only 4 percent of the expected 20 percent average premium increase next year.” “In other words, the sharp jump in premiums cannot be blamed on the phase-out of the enhanced subsidies. The real drivers are the same structural flaws that have plagued Obamacare since 2014 and rising health care costs,” Gabrielle Kalisz explained, the program manager for the Paragon Institute, wrote. Kalisz continued: The navy portion represents the 2025 benchmark premium of $8,326 for a representative of the average ACA enrollee — a 50-year-old with income at 200 percent of the federal poverty level. In 2026, premiums are projected to increase on average by 20 percent, raising the benchmark premium to $9,991. Of that $1,665 total increase, $333 (4 percent) is attributable to the expiration of the Biden-era COVID credits, shown in orange. The remaining $1,332 (16 percent) — illustrated in light blue — is due to all other factors driving higher premiums in 2026. As the figure shows, of the 2026 premium, 83.3 percent is the 2025 base, 13.3 percent is from other factors, and just 3.3 percent is from the expiration of the COVID credits. In their filings, insurers attribute the premium increase to higher medical utilization, inflation, health care consolidation (which the ACA contributed to), and surging costs for expensive drugs — especially GLP-1 weight-loss and diabetes medications, specialty drugs, and biologics (including new gene therapies). Insurers also cite workforce shortages, price transparency measures, and tariffs as nominal contributors to increasing premiums. [Emphasis added] She added, “Under the COVID credits, the federal government has been paying 93 percent of the premium for the typical enrollee. Even after the COVID Credits expire, the federal government will still cover more than 80 percent of the typical enrollee’s premium through the regular subsidy. Taxpayers, not consumers, will remain the overwhelming source of revenue for insurers selling ACA exchange plans.” Brian Blase, a former senior Trump administration official during Trump’s first term in office and president of the Paragon Health Institute, wrote that premiums have drastically risen since the passage of the ACA. House Ways and Means Chairman Jason Smith (R-MO) has said that the enhanced credits subsidize wealthy Americans and fill the coffers of big insurance companies. As Smith noted in a press release, the wealthiest of Americans could benefit from these subsidies: With no income cap, expanded PTCs [premium tax credits] benefit wealthy enrollees in high-cost areas. A family of four in Prescott, AZ making $600,000 annually qualifies. A married couple in West Virginia making $580,000 annually qualifies. A single individual in Vermont making $180,000 annually qualifies. [Emphasis original.] Michael Cannon, the Cato Institute’s director of health policy studies, said, “What the enhanced subsidies do is they subsidize people making from $129,000 all the way up to $600,000 per year. And so these are really the Obamacare subsidies for the wealthy.”
