People who get their health insurance through the Affordable Care Act will be shopping for new policies on Nov. 1. And the price tag will likely be significantly higher — possibly more than double.
The enhanced tax credits for ACA policies went into effect in 2021 as part of the American Rescue Plan following the COVID-19 pandemic and were extended through this year. But the credits expire at the start of 2026.
These expiring tax subsidies are at the heart of the fight in Congress that is causing the government shutdown. Democrats want them extended before they vote to pass a budget.
Here are five things you should know about how it will impact Hawaiʻi residents.
1. What are the enhanced subsidies, and how much of an increase will people see?
The subsidies capped the cost of ACA health insurance at no more than 8.5% of a person’s income.
“If your premium prices were more than 8% of your income, the federal government kicks in a tax credit to help you afford those,” said Elizabeth Pancotti, the managing director of policy and advocacy at Groundwork Collaborative, a progressive thinktank tracking economic policy.
“That was a temporary increase, which expires at the end of the year. And so as a result, next year, when folks start paying those premiums and just next week when they log in to pick their plans and see those sticker prices, they will see a massive increase.”
Projections show that a family of four making about $100,000 a year could see an increase of about $350 a month to their health plans.
2. How many people in Hawaiʻi with ACA plans will be impacted by the cuts?
About 23,000 people in Hawaiʻi have health insurance through the ACA. Over 80% of those people use the expiring tax subsidies.
Pancotti added that even those who don’t use the enhanced subsidies will likely see higher premiums of about 20% due to a combination of factors like tariffs, rising health care and drug costs, and the expiration of the subsidies themselves.
She said the increases will cause people to forgo insurance, resulting in less health monitoring and therefore higher payout rates for insurance companies.
3. Who will be most impacted?
State Health Planning and Development Agency Director Dr. Jack Lewin explained that the state’s Prepaid Healthcare Act helps protect Hawaiʻi from some of the increased costs. The law requires Hawaiʻi employers to provide health insurance to employees who work more than 20 hours a week, but it doesn’t cover everyone.
“People here that are self-employed, people who are working on commissions like realtors and some of those folks, they don't count as employed people under the law,” he said.
“So those folks, the small business owners, the gig workers, people working on commissions, they fall through the cracks and they need the exchange.”
Hawaiʻi Small Business Development Center Executive Director Joseph Burns explained that these potential increases in health insurance costs further burden small business owners already facing roadblocks, like supply chain issues.
“It's very serious and it definitely affects their decisions and will affect their decisions about going forward or even about starting a business,” he said.
“If these costs are going to become very burdensome and it doesn't work in the business model, this might put someone off to not start a business – or at least not start it now.”
4. What if the enhanced subsidies are extended?
Three scenarios could happen.
One, Congress does not extend the enhanced subsidies, and people then have to pay the higher premiums. Two, Congress extends the subsidies before the enrollment starts on Nov. 1, which is the simplest transition. Lastly, Congress extends the subsidies after enrollment begins or even after it closes.
Lewin explained that it’s not clear what will happen in that last scenario.
“It's going to depend on the language that they use,” he said. “The best hope is that somehow Congress ends its shutdown and they pass an emergency measure to extend now.”
Enrollment ends on Dec. 15 for plans that start on Jan.1, 2026. People can also pay their first month’s premium in January, and then change to a plan that will start in February by Jan. 15, which is the absolute last day people can enroll or change health plans for the year.
However, transmitting information about changes to policy options to people who have already selected a plan concerns health care experts like Pancotti.
“Trying to get information out to the millions of Americans who buy their health insurance on these exchanges is extremely difficult,” she said.
“People may choose a cheaper plan, one with a higher deductible or with higher copays as a result of these prices. And what isn't clear is if they will be allowed to go back in and make a different choice in light of the subsidies being extended. … I hope that what policymakers decide to do is allow people to go back in and choose a different plan.”
The state Department of Commerce & Consumer Affairs Insurance Division explained that Hawaiʻi is part of the Medicare & Medicaid Services Federally Facilitated Marketplace.
So if the subsidies are extended and the federal Centers for Medicare & Medicaid Services makes those adjustments, Hawaiʻi will adjust along with it – unlike other states that run their own marketplace and will have much higher administrative burdens.
5. What relief is available to people facing higher insurance premiums?
Lewin said the state is paying attention to these issues and the future cuts to Medicaid. He said Gov. Josh Green is working with Hawaiʻi’s congressional delegation. Green is currently in Washington, D.C.
Lewin added that the Legislature is also considering how it can help going into the next legislative session.
“We're considering looking at providing health insurance for keiki who fall through the cracks in our state because they're not very expensive,” he said. “We don't want anyone to go without health insurance, but in particular, we want to be able to make sure that our keiki are covered as the first priority.”
Small Business Chamber of Commerce Hawaii Executive Director Holly Kessler wrote in an email that she is also concerned about what the changes will mean for their members.
“To help address this issue for our members who come from various industries, we have partnered exclusively with Hawaii Medical Assurance Association to provide cost-effective quality group health insurance plans with preferred member pricing,” she wrote.
“Our Association Health Plan has helped many small businesses improve their bottom line and benefit from our quality customer service.”
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