Congressional Plans to Address Rising Obamacare Premiums Focus on Reduced Coverage Options

In response to the anticipated surge in health insurance premiums under the Affordable Care Act (ACA) next year, the Trump administration has proposed encouraging consumers to opt for plans with less comprehensive benefits, including high-deductible options. The Department of Health and Human Services recently announced efforts to expand access to 'catastrophic' health plans through the federal marketplace, healthcare.gov. These plans are designed to have lower monthly premiums but come with substantially higher deductibles, requiring individuals to spend over $10,000 annually before coverage kicks in. They are primarily targeted at those who seek basic coverage against worst-case scenarios and are usually limited to people under 30, though now expanded to others experiencing loss of premium subsidies.

The move is part of a broader strategy to address the looming expiration of enhanced COVID-19 subsidies, which have temporarily increased premium tax credits and helped reduce costs for millions. Currently, these subsidies are set to expire at year's end, leading to an estimated average 75% increase in premiums for many consumers, according to KFF. In response, Congress has seen some bipartisan efforts to extend these subsidies through legislation that would last into mid-2026, but the likelihood of passage remains uncertain amid political disagreements.

By expanding access to catastrophic plans, the administration aims to offer an alternative for Americans who face affordability challenges with traditional ACA plans. These options are accessible through the marketplace for those who lose eligibility for subsidies due to household income, with some qualifying for a 'hardship' exception. However, critics note that catastrophic plans tend to be less attractive because of their high deductibles and limited coverage, and they are not available in all states.

Insurance industry stakeholders, including AHIP, support the extension of increased premium tax credits but caution that catastrophic policies are not substitutes for comprehensive coverage. The current landscape is complicated further by legal challenges to certain rule changes introduced by the Trump administration, which temporarily paused some verification requirements for ACA enrollment.

As open enrollment approaches, consumers are advised to carefully evaluate all available plans, including bronze, silver, gold, and catastrophic options, to find the coverage that best suits their financial and health needs. The ongoing legal and policy debates will continue to shape the options and premiums for the upcoming enrollment season.