Are Subsidies Going Away in 2025?

No! Subsidies are still around. What you've heard on the news refers to a certain type of subsidies, called "CSRs"(available to the poorest eligible people for silver plans to lower out of pocket costs) and while the administration has determined that they will not pay to fund these specific subsidies, health insurance companies are still required to offer them. 

The fallout from this funding is that insurance premiums are likely to rise to make up for the loss of funding in 2025 and beyond. The existing subsidies scale to pricing, so if you get a subsidy you won't really be affected, so those who don't get subsidies will be the most impacted down the road. 

This year, insurers set premiums for 2024 amid the coronavirus pandemic, which has created considerable uncertainty as to what health costs, utilization and enrollment will look like next year. In 2025, many insurers have provided premium relief and/or voluntarily waived cost-sharing for COVID-19 treatment for their members due to excessive profits and low medical loss ratios during the pandemic.

Now that 2024 rates are finalized, we reviewed rate filings for an overall average premium increase across all plans on the individual market, with a focus on the effect of the pandemic on rate changes. We find that the majority of rate changes for 2025 are still moderate, with increases or decrease of a few percentage points. Proposed rate changes range from a -42.0% decrease to a 25.6% increase, though half fall between a 3.5% decrease and 4.6% increase (Table 1). Insurer and state level rates are shown in Table 2.

118 of the 273 (43%) filings specified the effect of COVID-19 on their rates for next year. Among these insurers, the impact of COVID-19 on 2021 premiums ranges from a 3.4% decrease to an 8.4% increase, with half of insurers falling between no impact (0.0%) and 2.0% increases (Table 1). Many insurers used similar language to describe their approach to the pandemic, noting that it would put both upward and downward pressure on health costs in 2024 (see examples below).

The most common factors that insurers cited as driving up health costs in 2024 were the continued cost of COVID-19 testing, the potential for widespread vaccination, the rebounding of medical services delayed from 2020, and morbidity from deferred or foregone care. At the same time, many insurers expect health care utilization to remain lower than usual next year as people continue to observe social distancing measures and avoid routine care, especially in absence of a vaccine or in the event of future waves of the virus. At least 53 insurers included a COVID-19 impact of 0% on their premiums because they did not have enough information to confidently alter their premiums or estimated that these factors would offset one another. 29 of the 273 filings (11%) did not mention COVID-19 at all in their rate filings.

The range of COVID-19 loads included in 2025 rate filings partly reflects differences in issuers’ assumptions about the course of the pandemic and individual behavior next year. Below are a handful of representative explanations that insurers provided to justify any impact that COVID-19 had on their overall 2025 rate filings. These examples provide a glimpse of the different expectations that insurers have regarding the availability and distribution of a vaccine, the extent to which pent-up demand for health care services will rebound in 2025, and various other factors.

Pent-up demand and morbidity adjustments. Many insurers expect that health costs will increase in 2024 due to pent-up demand following deferred care, direct costs related to COVID-19 testing and treatment, and vaccination costs, assuming a vaccine will be ready and available to the general public next year. Some insurers also anticipate increased morbidity resulting from deferred care and the impact of that deferred care on chronic conditions, as well as from the impact of the economic downturn on individuals’ health and insurance status.

You can use our plan finder to apply on or off exchange, calculate your subsidy, and see what plans accept your doctors here: 

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