Hold Onto Your Hats: How much more will ALASKA residents pay if the improved #ACA subsidies aren't extended?

Originally posted 2/05/25

Alaska has around ~28,000 residents enrolled in ACA exchange plans, 88% of whom are currently subsidized. They also have an unknown number of off-exchange enrollees in ACA-compliant individual market policies, or roughly 4% of the total state population.

In early 2021, Congressional Democrats & President Biden passed the American Rescue Plan Act (ARPA), which dramatically expanded & enhanced the original premium subsidy formula of the Affordable Care Act, finally bringing the financial aid sliding income scale up to the level it should have been in the first place over a decade earlier. They then extended the subsidy upgrade out by another 3 years via the Inflation Reduction Act.

In addition to beefing up the subsidies along the entire 100 - 400% Federal Poverty Level (FPL) income scale, the upgrade eliminated the much-maligned "Subsidy Cliff" at 400% FPL, wherein a household earning even $1 more than that had all premium subsidies cut off immediately, requiring middle-class families to pay full price for individual market health insurance policies.

Unfortunately, the improved subsidies are currently scheduled to end effective December 31, 2025. Needless to say, with Republicans holding a trifecta, it's highly unlikely that the IRA's enhanced subsidies are going to be be extended further. They had the opportunity to do so as part of H.R. 1 (the so-called “Big Beautiful Bill”), but chose not to.

It gets even worse:

In addition, the so-called “Affordability & Integrity Rule” put into place by RFK Jr., & Dr. Oz at the Centers for Medicare & Medicaid Services (CMS) is causing 2026 subsidies to be even less generous and gross premiums to increase more.

In Alaska, the good news is that average gross 2026 premiums will still be essentially flat year over year.

The bad news is that despite this, net 2026 premiums--that is, how much you actually have to pay in premiums--are still going to skyrocket for the vast majority of enrollees.

I'm using four household scenarios, at several different income levels for each.

It's important to note that in Alaska the Federal Poverty Level threshold is 25% higher than in the contiguous 48 states, which means I have to use a different subsidy table and a wider income range than for most states:

• a 50-yr old single adult earning between $20K - $80K/year
• a 30-yr old single parent w/an 8-yr old child, earning between $30K - $110K/year
• a 40-yr old couple w/2 children age 15 & 12, earning between $50K - $160K/year
• a 64-yr old couple earning between $30K - $110K/year

There's several additional caveats:

• The average Benchmark Silver ACA premiums are based on 2026 levels.

• Benchmark Silver premiums vary widely depending on where you live & other factors. For Alaska I'm usuing Juneau.

• In some states, children under 19 are eligible for CHIP or Children's Medicaid at a significantly higher household income level. This can cause a sudden jump in full-price premiums as the household income moves over that eligibility threshold.

• These analyses assume that the enrollees choose the benchmark Silver plan, and that the benchmark plan remains the same both years (the actual benchmark plan often changes from one year to the next).

• NEW: The original version of this analysis included a 4.3% increase in the unsubsidized benchmark plan premium based on a projection by the Congressional Budget Office. However, that was a national average projection. This updated version assumes the actual 2026 Alaska rate filings which average an 0.2% reduction statewide.

• NEW: The original version of this analysis assumed that the Applicable Percentage Table would revert back to the pre-2021 levels. However, the Trump Administration recently modified the formula used to calculate this which means that ACA subsidies will be even less generous starting in 2026.

With all that understood, let's take a look:

• A single 50-yr old earning $40,000/yr would see his premiums jump from $98/month to $236/month...a 141% increase.

• A single parent earning $50,000/year would go from paying $85/month to $267/month...over 3.1x as much.

• A family of four earning $70,000/year would see their premiums jump from $89/month to $326/month...over 3.6x as much.

• A 64-yr old couple earning $110,000/yr would skyrocket from $828/month to a jaw-dropping $4,910/month...or nearly 6x as much.

That's not a typo: The older couple would have to pay over $58,000/year in premiums alone...or over HALF of their gross income, just to hold onto the same Silver plan that they have today.