Why 60-year-olds may face an annual increase of nearly $10,000 in health insurance costs

With open enrollment for health insurance through the Affordable Care Act’s health insurance marketplace starting November 1, seniors may be in for a rude awakening when they see the cost of their monthly premiums for 2026.

A recent analysis by KFF, a health policy nonprofit, found that a 60-year-old who earns $62,700 a year — just above the subsidy eligibility threshold — would pay nearly $9,600 a year if the extension of premium tax credits ended and premiums increased by the amount expected by insurers.

Eligibility for premium tax credits, subsidies that reduce the cost of monthly health insurance premiums, has been expanded through COVID-19 era rules, providing many enrollees with greater tax breaks and allowing more people to qualify. More than 90% of shoppers are eligible for the tax credit in 2024. These rules are scheduled to expire at the end of this year, increasing the cost of health insurance premiums for many.

Early retirees are particularly at risk. They may not be eligible for Medicare yet (eligibility typically begins at age 65) and since they are no longer working, they are not receiving insurance through their employer.

As a result, they may rely on health insurance from the ACA Marketplace. Additionally, because insurers typically charge seniors higher premiums, this group is particularly vulnerable to higher premiums starting next year, according to KFF.

In its analysis, KFF found that a 64-year-old earning $62,700 would pay $11,000 more annually. In contrast, a 50-year-old who gets this amount would pay an additional $4,500 per year.

Before 2021, premium tax credits were only available to households with incomes below 400% of the federal poverty level, but those subsidies were expanded in 2021. The enhanced subsidies were then extended through the end of 2025 under the Biden administration’s inflation-reducing law.

But not only the elderly will be affected. “The majority of people who receive ACA coverage receive advanced premium tax credits, so the most people will be affected by the expiration of these tax credits,” said Lynn Cotter, senior director of health policy research at KFF. Investopedia In an August interview.

The federal government has been shut down for more than three weeks as Democrats and Republicans in Congress face a stalemate over the status of these ACA benefits.

Democrats have said they will not reopen the government until Republicans agree to extend benefits, while Republicans have said they will not negotiate the issue until the government is reopened.