Medical costs could skyrocket as ACA subsidies expire
Millions are at risk of skyrocketing health costs in 2026 if Congress fails to extend health care subsidies.
Senate Republicans want to give Americans up to $1,500 to cover medical costs, rather than extending the Affordable Care Act’s enhanced subsidies that have lowered health insurance premiums for millions of Americans.
Republican Sens. Mike Crapo and Bill Cassidy announced a bill on Dec. 8 that would deposit $1,000 to $1,500 into eligible consumers’ health savings accounts. The funding would replace an extension of enhanced COVID-19-era tax credits that significantly lower health insurance premiums under the Affordable Care Act, often referred to as “Obamacare.”
Senate Majority Leader John Thune said the Senate plans to vote on the Crapo-Cassidy bill on Thursday, Dec. 11. The Senate is also scheduled to vote Thursday on a Democratic proposal to extend the ACA’s enhanced premium tax credit for three years when it expires.
Who would be eligible to receive $1,500 under the Republican bill?
Under the Crapo-Cassidy Act, the federal government would deposit $1,000 into health savings accounts for consumers ages 18 to 49 and $1,500 for consumers ages 50 to 64.
The payments are limited to those making up to 700% of the federal poverty level and will amount to $109,550 for an individual and $225,050 for a family of four in 2025.
The law also requires people to enroll in bronze or catastrophic Affordable Care Act plans. People will receive deposits into health savings accounts in 2026 and 2027.
In a one-page explanation of the bill, Republicans said the bill would send money to patients rather than insurance companies, lowering health insurance premiums and costs. The bill also prohibits the funds from being used for abortion or transgender services.
How much medical care can you get for $1,500?
Health savings account deposits are not enough to cover the average deductible of most ACA bronze or catastrophic plans.
The average deductible for an individual’s Bronze Affordable Care Act plan in 2026 is $7,476, according to an analysis by KFF, a health policy nonprofit.
A deductible is the amount a consumer must pay for in-network services before most coverage begins. But the Obamacare plan requires covering the full cost of nearly two dozen preventive health services, including immunizations and screenings, blood pressure, cholesterol, diabetes and colorectal cancer.
Health experts said if the Crapo-Cassidy bill becomes law, consumers could end up paying hefty out-of-pocket costs when going to doctors and hospitals.
“This may work for people who are very healthy,” said Sabrina Corlett, co-director of Georgetown University’s Center on Health Care Reform. “But for people with chronic conditions, this is not much of a step forward.”
How do health savings accounts work?
Health savings accounts are paired with high-deductible health insurance plans and allow consumers to save money before taxes. This money can be used for eligible expenses such as doctor and hospital bills and prescription drugs. Consumers can roll over their Health Savings Account balances from year to year, invest the funds, and spend the tax-free profits on qualified expenses.
President Trump and Republicans consider sending health care payments to consumers
Cassidy, chairman of the Senate Health, Education, Labor and Pensions Committee, said giving cash to patients could help them negotiate lower costs and make them better health consumers.
The Crapo-Cassidy bill incorporates President Donald Trump’s idea to send money to consumers rather than health insurance companies. On Tuesday, President Trump said he “likes the concept” of the Crapo-Cassidy bill.
“I love the idea of money going directly to the people, not to the insurance companies,” Trump said. “It could be in a health savings account, it could be in a variety of ways.”
The average cost of health insurance for a family is approximately $27,000
Without enhanced tax credits that expire at the end of 2025, the average cost for the 22 million Americans with subsidized ACA insurance would more than double on January 1, 2026, according to the health policy nonprofit KFF.
While Democrats and Republicans debate the fate of the roughly 24 million Americans enrolled in ACA plans, Congress has paid less attention to the finances of most working-age Americans who get health insurance through their employers.
Approximately 154 million working-age adults and their families obtain insurance through their workplaces, which remain the backbone of the nation’s health insurance system.
The average cost of a family health insurance plan offered through the workplace was $26,993 in 2025, an increase of 6% from the previous year, according to the annual Employer Health Benefits Survey released Oct. 22 by KFF, a health policy nonprofit.
In comparison, workers’ wages increased by 4% year-on-year, and inflation rose by 2.7%.
Nearly half of U.S. adults are worried they won’t be able to pay for their medical needs next year, according to a survey released Nov. 18 by West Health Gallup U.S. Medical Center.
Contributors: Joey Garrison and Francesca Chambers
