Summary:
- When enhanced Affordable Care Act tax credits expire at the end of the year, premiums in North Carolina are projected to rise.
- Nearly 1 million North Carolinians rely on ACA coverage today, about 10% of the state’s population.
- Rising uninsured rates will worsen health outcomes, force rural hospitals closer to closure, and make it harder for businesses to attract workers in communities without reliable health care access.
Are North Carolinians Ready for Their Affordable Care Act Premiums to Double?
In four months, Affordable Care Act (ACA) premiums are going to skyrocket and become unaffordable for millions of Americans. This is because when Congress passed the One Big Beautiful Bill Act (OBBB Act) this July, extending Trump’s 2017 tax cuts, it refused to continue the ACA’s enhanced premium tax credits.
Enacted in 2021, these greater premium tax credits made ACA health coverage affordable for 13 million more Americans and 500,000 more North Carolinians. Today, approximately 24 million Americans and 1 million North Carolinians have ACA coverage. Nearly 10% of our state’s population relies on ACA policies for coverage today.
Massive ACA Premium Increases Are Coming Soon
Premiums are going to explode when the enhanced ACA premium tax credits expire at the end of the year. While theoretically Congress could extend the enhanced credits this fall, it is highly unlikely because there have been no related bipartisan negotiations. Without these enhanced tax credits, premiums are projected to soar on average 75% in the United States and 102% in North Carolina. An estimated 8.2 million Americans and 320,000 North Carolinians will become uninsured because they will not be able to afford these steep premium hikes. This rapid rise in the number of uninsured will hurt not only their families’ health and finances, but our country’s economy.
ACA Premiums Will Increase on Average 102% in NC, But Will Be Much Higher for Low-Income and Older Insureds
The upcoming ACA premium explosion will vary broadly. This is due to the enhanced tax credit amounts being based on income, age, county residence, and the number of household members covered. The lower one’s income, the greater the enhanced premium subsidies. The subsidies also rise the older one is, because health costs generally increase with aging.
As a result, our most vulnerable citizens, low-income and older insureds, will have their premiums rise much higher than North Carolina’s 102% average increase. For example, for 45-year-old, single insureds earning 166% of the federal poverty level, their silver plan premiums are expected to increase by an average 573%.
Calculate Quickly Your Projected ACA Premium Increase
By clicking on this site, you can calculate in a minute your household’s estimated premium increase in North Carolina because of the elimination of the enhanced premium tax credit. For example, ACA premiums for a silver plan will increase an estimated:
- 219% for a family of four earning $60,000 in rural Surrey County
- 593% for a single 30-year-old making $25,000 in Wake County
- 31% for a childless 40-year-old couple making $120,000 in Buncombe County
In addition, the 2021 law’s cap on premium costs also expires on December 31st. This provision guarantees that for all ACA insureds, no family pays more than 8.5% of their income on health insurance premiums. This cost cap has been a great benefit to the middle class. Previously, the ACA premium subsidies ended for households making more than 400% of the federal poverty level.
Average Premiums Projected to Rise an Additional 18% Because of Inflation, Tariffs, and a Sicker Risk Pool
But that isn’t all. Tacked on to these massive rate increases, ACA preliminary rate filings for 2026 are estimated to increase nationwide on average by an additional 18% from other factors. In North Carolina, some ACA insurers’ preliminary rates are projected to go up as much as 39.9 %. These basic premium rate increases will be the largest since 2018.
These basic rate increases are caused by three main factors: health care inflation; new tariffs on drugs and health supplies; and sicker, more costly ACA risk pools. When premiums spike, healthier insureds are more likely to drop out, while sicker insureds remain in the risk pool and pay the increased costs. The latter two factors are directly attributable to administration policies.
The final ACA premium rate increases will be released in late summer of this year. Open enrollment for the exchanges, reflecting these huge price increases, begins November 1 and ends January 15th.
Why North Carolina Needs an Affordable ACA Insurance Exchange.
Nearly 50% of all North Carolinians get group health insurance through their employer. But many smaller employers do not offer coverage, especially in modest and low-income service employment. These employees do not qualify for Medicaid (which cuts off at 138% of the state’s poverty level) and cannot afford private health insurance without government subsidies.
The median North Carolinian household annually earns in the private sector $67,474. The full annual cost of a household health insurance policy in 2023 in North Carolina was $22,650. Financial reality makes clear that without government insurance (Medicare, Medicaid, and CHIP) or government subsidies for private insurance (the ACA), millions of North Carolinians cannot afford health insurance.
Being Uninsured Hurts North Carolina’s Families and Our State’s Economy
Being uninsured is bad for one’s health. The uninsured often delay diagnosis and treatment for months, allowing their illnesses to fester. When uninsured people finally go to emergency rooms, the cost of treatment is 12 times greater than the same care in the doctor’s office.
Studies show that those without health coverage are likely to die prematurely and be sicker than those with coverage. Yale’s School of Public Health estimates that 51,000 more Americans annually will die sooner because of cuts to Medicaid and the ACA. Being sicker, the uninsured miss work more frequently and are less productive. This hurts their families’ finances as well as our state’s economy.
Ensuring as many North Carolinians as possible have health coverage is vital to keeping rural hospitals and clinics open. Because rural health facilities are smaller and have more non-paying patients, they have thinner operating margins than urban hospitals. The ACA and Medicaid expansion have served as financial bulwarks in preventing further rural closures and reductions in critical care, such as maternity care.
Closing healthcare facilities harms all residents, including those with private insurance and Medicare. It results in rural residents having to travel longer distances to receive the care they need. It also undermines rural economies. Businesses are reluctant, for good reason, to move to areas without adequate, available health care for their workforces.
In conclusion, Americans on the Affordable Care Act are shortly going to have sticker shock, and many are going to drop coverage. This will negatively impact their families and our economy. And on January 1, 2027 (conveniently after the mid-term elections), $911 billion in Medicaid cuts over ten years will kick in. Our country, state, and citizens are going to pay a very high cost.
