US: Millions Face Soaring Health Costs as Subsidies Expire

The US Congress’ failure to extend public subsidies for private health insurance threatens the right to health and financial security of millions of people, Human Rights Watch and Oxfam America said today. As open enrollment for private health insurance purchased through the Affordable Care Act’s (ACA) government-operated marketplaces began on November 1, 2025, millions of households will no longer be able to afford health insurance.

In response to the Covid-19 pandemic, the 2021 American Rescue Plan Act dramatically reduced the cost of private health insurance for low- and middle-income earners by enhancing public subsidies for plans purchased through ACA marketplaces. When the One Big Beautiful Bill Act (OBBBA) became law in July 2025, it expanded and made permanent numerous tax cuts that disproportionately benefit wealthy households and large corporations, while failing to extend these enhanced subsidies. Without new legislation, the subsidies will expire at the end of 2025.

“Congress’ failure to extend these subsidies is driving the government shutdown and will harm millions of people already struggling with soaring prices and healthcare costs,” said Matt McConnell, economic justice and rights researcher at Human Rights Watch. “These cuts are making ordinary people sacrifice their health to pay for tax breaks for the wealthy few.”

The introduction of the ACA in 2010 made health care more accessible for millions of people, including by reshaping federal regulation of the private health insurance industry, which in 2023 provided health insurance coverage for more than 90 percent of the population, or over 300 million people. Among other changes, the law created government-operated marketplaces through which people who do not receive health insurance from their employers or public programs could purchase coverage from a private company.

The ACA also established public subsidies to reduce the cost of health insurance premiums for these private marketplace plans. But those earning above 400 percent of the federal poverty level—$62,600 for an individual in 2025—were ineligible. This so-called subsidy cliff was especially harmful to older people who were not or were not yet eligible for Medicare coverage, the public health insurance program for older people and people with disabilities, because health insurance companies were allowed, within certain limits, to charge older people more for the same services.

The 2021 American Rescue Plan Act temporarily addressed this subsidy cliff by expanding eligibility to those earning above this income limit and capping premium costs for standard marketplace plans under the ACA at 8.5 percent of household income. These “enhanced premium tax credits,” originally set to expire at the end of 2022, were extended through 2025 by the Inflation Reduction Act.

Since coming into effect, these changes have significantly reduced healthcare costs for millions of people. The population covered by ACA marketplace plans has more than doubled, rising from 11.4 million in 2020 to 24.3 million in 2025, helping drive a decline in the country’s uninsured rate.

“Instead of ensuring ordinary people can access adequate health care, the administration and Congress have chosen to prioritize large tax handouts for the wealthy and well-connected,” said Rebecca Riddell, senior policy lead for economic justice at Oxfam America. “Not extending subsidies risks further inflaming economic inequality, which is already sky high and likely to increase following massively regressive cuts to social protection passed in July.”

On July 4, 2025, the OBBBA became law, expanding and making permanent many tax cuts originally implemented during President Donald Trump’s first term that disproportionately benefit large corporations and the country’s wealthiest households. The tax breaks for just the richest 0.1 percent of households alone cost substantially more per year than the enhanced premium tax credits; around $50 billion compared to $35 billion.

To partly offset the reduction in revenue from these tax cuts, the act dramatically reduces federal funding for public programs essential for human rights, including a projected $1 trillion in cuts over the coming decade to Medicaid, the public health insurance program for people with low-incomes, which will disproportionately hurt Black people and other people of color.

Unless Congress extends these enhanced subsidies, millions of people will soon be forced to choose between paying for extremely expensive health insurance or risking the potentially catastrophic harm of being uninsured, Human Rights Watch and Oxfam America said.

Premium costs for the average subsidized ACA marketplace plan will more than double, rising from an average of $888 per year in 2025 to $1,904 in 2026, according to KFF, a nonprofit health policy research organization. KFF estimated that the annual cost for an average 60-year-old couple earning just above the ACA’s income eligibility limit—or $85,000 annual household income in 2026—will increase by more than $22,600 next year, rising from 8.5 percent of household income to about 25 percent.

The Commonwealth Fund and Urban Institute, two US-based nonprofit organizations, have estimated that about 4.8 million people will become uninsured next year if these subsidies expire, increasing the US’ uninsured population by about 21 percent.

People without health insurance are far more likely to forgo and ration health care because of costs and are much more likely to die as a result. Cost-based access barriers are incompatible with health care as a human right for all, worsen inequalities, and can undermine people’s ability to bear costs associated with the enjoyment of other human rights such as the rights to housing, food, and education.

Older people without Medicare coverage because they are not yet old enough to qualify for coverage, or because of their immigration status or other restrictions, will be especially harmed. The country’s large and growing population of part-time and gig workers, also largely people of color, who are not legally required to receive employer-sponsored health insurance under the ACA, will also be disproportionately impacted. Even those with health insurance are likely to see their premium costs increase next year because of cost-shifting associated with this dramatic increase in the uninsured population.

On October 1, the federal government shut down as a result of Congress’ inability to pass a budget for the 2026 fiscal year. Democratic Party lawmakers, the minority party in both chambers of Congress, have said that their support for any bill to reopen the government is contingent on the extension of these enhanced healthcare subsidies.

Under international law, everyone has the human right to the highest attainable standard of physical and mental health, which includes the right to access healthcare goods and services regardless of one’s ability to pay. Many countries have better realized this right by creating a public healthcare system that aims to be universally accessible for all, by providing universal health insurance coverage, or through some combination of these two.

“Congress should fix the country’s healthcare system,” McConnell said. “But in the meantime, they shouldn’t make things far worse by cutting this lifeline for millions.”

For more Human Rights Watch reporting on economic justice and rights, please visit: https://www.hrw.org/topic/economic-justice-and-rights

For more Oxfam America work on U.S. inequality, please visit:
https://www.oxfamamerica.org/explore/issues/economic-justice/inequality-in-the-us/