Federal tax credits that help people pay for health plans on the open marketplace are set to expire in 2026, and that means insurance costs for many will go up.
That’s especially true in southern Illinois, where certain insurance customers will see some of the highest premium hikes in the country when they start shopping for plans on Nov. 1, when open enrollment begins.
Without the subsidies, some families shopping on the Illinois health insurance marketplace will see a sixfold increase in monthly premiums.
“Southern rural communities will see much higher increases,” said state Department of Insurance Director Ann Gillespie.
“Some [consumers] are going to lose their coverage entirely,” she said. “But everybody is going to be hit by this.”
According to data from the nonprofit health organization KFF, a 60-year-old couple making $85,000 annually in southern or western Illinois could see monthly premiums for a benchmark plan increase anywhere from 300% to 535%.
In Missouri, the same couple living in the St. Louis area would see their monthly premium increase 246%.
How much people will pay will depend on where they live, how much money they make and other demographic factors. Some will still be able to get subsidies, depending on their household income.
Marketplace plans for all Illinoisans are going to cost an average of 78% more in 2026, regulators said earlier this week.
Congress this year declined to renew “enhanced” health care subsidies for 2026. Such subsidies are tax credits that help certain people pay for insurance plans purchased on the open health care marketplace. In Missouri, that’s healthcare.gov. In Illinois, that’s a newly formed state-run marketplace called Get Covered Illinois.
Lawmakers approved the enhanced subsidies in 2021, allowing those making more than 400% of the household poverty wage to use tax credits to buy their health plans.
The fight to extend the credits is at the heart of the federal government shutdown, which is nearing the one-month mark.
Without such help buying plans, middle-class households could be squeezed if they make too much to be eligible for credits but not enough to pay for the unsubsidized health care costs.
Thomas Johnson, a semiretired optometrist in Macoupin County, said during a press call earlier this month that he falls into that category.
“If my premium goes up to $900, $1,200, whatever I'm hearing, I can't afford that without tapping into my Roth IRA, my 401(k),” he said during the call, which was organized by U.S. Rep. Nikki Budzinski of Illinois. “My idea that I might retire someday is in jeopardy, and I have nowhere else to go for insurance other than the ACA.”
Johnson doesn’t qualify for Medicaid, he said.
“I’m not poor. I’m not going to end up on a street corner or ride the river living in a tent. But this will change my and my disabled wife’s lives, maybe for the rest of our lives,” he said.
Costs rising
Insurance rates are going up even for people who are still eligible for the tax credits, Gillespie said.
She said rates in southern Illinois are high partially because the region has a high number of people on Medicaid. The congressional spending bill passed earlier this year contained cuts to the federal health insurance program that experts predict will move millions off Medicaid rolls.
That means providers and insurers are bracing for increases in costs.
“When [insurers] lose the revenue stream from Medicaid, they're going to have to find some way to close that gap, and so the most likely way to do that is to raise rates for commercial payers,” Gillespie said.
Dan Meuse, deputy director of the state health and value strategies program at Princeton University, said the factors making other goods more expensive — financial uncertainty, new tariffs and inflation — also affect the health care industry.
“All those things together create a perfect storm in certain parts of the country,” he said. “And I think the center of the country is really feeling that.”
Regions that have a mix of urban and rural health providers are seeing big spikes in premiums, because insurers there deal with the high amounts of specialized care prevalent in more populated areas and the high numbers of Medicaid patients in rural areas, Meuse said.
Some people will decide to not enroll in health insurance at all, Meuse said.
“Folks who are the sickest will find a way to pay for their health coverage because they know that they need it,” he said. “Conversely, healthier folks may decide to sit the market out. The effect of healthy people sitting the market out while sick people stay covered is that next year, those premiums are going to ratchet up even higher.”
A new marketplace
This year marks the debut of Get Covered Illinois.
Running its own insurance shopping platform will allow the state to offer more help for residents through insurance navigators and other employees, Get Covered Illinois Director Morgan Winters said.
“We have the authority to offer Illinoisans more enrollment support, and this type of support is so critical, particularly in years when so much is changing,” he said.
Illinois in the future could also offer enrollment periods if, for example, the federal government votes to approve the expanded tax credits after the official sign-up period ends, Winters said.
“Being a state-based marketplace is really, really critical when it comes to having these kind of unforeseen circumstances that states need to react to,” he said.
Even if residents are hoping Congress will in the coming weeks reapprove the tax subsidies, customers should still shop for their plans early, Winters said. Those who may not be able to afford their former plan will likely be able to find a lower-cost alternative, even if it has a higher deductible.
