PLANNING AHEAD: Impact of the Big Beautiful Bill on health insurance costs

Last week Pennie, Pennsylvania’s official health insurance marketplace under Obamacare, sent a notice to enrollees notifying them of changes under the  law and the Big Beautiful Bill recently passed by Congress. It begins by stating “IMPORTANT — Unless Congress acts, you will pay more for your health plan in 2026.” The significant words here are “will” as opposed to “may” and 2026, which indicates how soon the changes will be implemented — that is, we are not discussing some time distant in the future. How many policyholders received the notice is unknown but Pennie is a very significant source of health insurance for Pennsylvanians.

• How important is Pennie? In 2025 Pennie reported almost half a million registrants during its open enrollment period. The report continued to state that its 2025 open enrollment period with a record-breaking enrollment of 496,661 marked the largest marketplace enrollment ever in Pennsylvania. It further noted then that “more Pennsylvanians can see their doctor, fill their prescriptions, and be protected against the extraordinary costs of a medical emergency.” (agency.pennie.com)

• The effect of the Big Beautiful Bill. The recent notice continued stating that, unless changes are made, those receiving tax credits will see a premium increase of 81 percent on average, with some paying double or four times as much as they pay today…”

Congress could have continued the enhanced premium credits. Instead, it passed the Big Beautiful Bill. One reason for this is the need in the Big Beautiful Bill passed by Congress to offset other provisions of the OBBB Act, most notably a continuation of the $15,000,000 as adjusted by inflation exclusion from federal estate tax for very high asset taxpayers. Surviving spouses already have an unlimited exclusion from federal estate tax on the death of their spouse so the exclusion is for next generations. The tradeoff is reflected in health insurance and Medicaid adjustments in the bill as well as other reductions to several programs.

• We Are Not Talking Only About Medicaid in Actions Taken by Congress. We have long been discussing the impact of the BBB as though Medicaid benefits only are affected. It is in that regard where there has been discussion regarding work and other requirements to receive Medicaid benefits. That change would occur later. The change to health insurance benefits is different. It is expected to occur with the beginning of 2026, a little over four months away. The impact would be dramatic.  According to Pennie, “the federal government has been offering enhanced premium tax credits since 2021 to make health insurance cheaper for Pennie enrollees…”

To change the system dramatically now would mean many Pennsylvanians and others throughout the country are unlikely to be prepared to pay massive increases in their health insurance premiums.

• Many policyholders are unaware they receive coverage under reduced payments due to Pennie/the Marketplace/Obamacare. Where individuals place their health insurance through private insurers with regularly recognized names they may well believe that government credits have nothing to do with the cost of their coverage. It is also not just for health insurance but also medications. In addition, Pennsylvania’s program to provide health insurance coverage to uninsured children and teens that are not eligible for or enrolled in Medicaid/Medical Assistance, is affected.

The impact of Obamacare on the Marketplace has not generally been recognized as it has worked with private insurers to provide coverage primarily where individuals do not have coverage otherwise as through employers and cannot otherwise afford high insurance premiums for medical care and medications which have in some cases become extraordinarily expensive.

• Can Anything Be Done Regarding Increased Costs? Note this is just one aspect of the expected changes regarding healthcare. However, as background, the enhanced Affordable Care Act subsidies introduced by the American Rescue Plan and extended by the Inflation Reduction Act are now set to expire at the end of 2025. This expiration is expected to cause a significant increase in premiums for millions of people and a rise in the number of uninsured individuals.

Congress could choose to extend the subsidies either related to a given time period or make them permanent. The notice from Pennie stated that those who are insured through them should “read all information you receive from Pennie and/or your health insurance company…” Also, if Congress does not change, “you’ll learn more about these potential impacts as we get closer to the 2026 open enrollment period (starting Nov. 1).

Janet Colliton, Esq. is a Certified Elder Law Attorney recognized by the American Bar Assn and Pa. Supreme Court and limits her practice to elder law, estate planning and administration, retirement planning, Medicaid and special needs, with offices at 790 East Market St., Suite 250, West Chester, 610-436-6674. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with long term care needs.