A small business owner in Thomaston, Maine, is contemplating dropping her health insurance due to escalating costs and the impending expiration of federal subsidies. Chloe Chalakani, who operates a handmade pasta business with her partner, faces a significant financial burden as health insurance premiums rise.
As the summer tourism season draws to a close, Chalakani is tackling her administrative responsibilities, which include health insurance enrollment. Currently, she pays a premium of $460 per month for a high-deductible plan. The expiration of enhanced tax credits in December 2023, coupled with rising insurance rates, has led her to declare, “I don’t plan to get insurance next year. I’m just not going to do it — I’ll pay out of pocket.”
Chalakani’s decision reflects a broader concern among health policy experts regarding the stability of the health insurance market. Young, healthy individuals opting out of the Affordable Care Act (ACA) could destabilize the system, which relies on a mix of demographics to function effectively. “You need people to be paying into the insurance system when they’re healthy so that they can take out when they’re sick,” explains health policy analyst, Dr. Jessica Cox.
The dynamics of health insurance markets depend heavily on younger, healthier individuals contributing more than they consume in healthcare. Conversely, older or sicker individuals often require more healthcare than they can offset with their premiums. This imbalance is critical; if healthy individuals start to leave the insurance pool, the costs for those who remain could skyrocket.
Dr. Cox emphasizes the potential ramifications: “If you only have sick people buying health insurance plans, then the average cost of that plan is going to be very high.” As younger, healthier participants like Chalakani drop out, insurance companies may find the market increasingly unattractive. This trend could lead to a scenario where only the most vulnerable remain insured, resulting in unsustainable premium increases.
Chalakani’s situation is emblematic of the challenges facing many Americans who obtain their health insurance through the ACA. Currently, approximately 24 million Americans rely on these plans. For many, the loss of federal subsidies will likely translate into significant financial strain. Chalakani acknowledges the risks of going uninsured, stating, “Should a catastrophe happen, I’ll probably say, ‘Wow, I should have had insurance.’ But at this point, I don’t have the financial ability to plan for that.”
The impending changes to the ACA could have widespread implications, particularly for hospitals and healthcare providers. Increased uninsured rates may strain healthcare systems, leading to changes in available services. Dr. Cox warns, “If hospitals face a lot of financial strain from having a lot more uninsured patients coming through their doors, then they might start changing the services they offer.”
The potential for increased uninsured rates is further compounded by looming cuts to Medicaid, which are anticipated to exacerbate the number of individuals without coverage. Experts predict that unless Congress acts swiftly to extend enhanced subsidies, many enrollees will face substantial premium increases when they search for plans for 2026.
For now, the decision for many, including Chalakani, hinges on whether lawmakers can reach an agreement to maintain the financial assistance necessary for affordable healthcare. She remains open to reconsidering her options, saying, “If they extend the enhanced subsidies so my premiums stay about the same, I might rethink my plan to go without health insurance in 2026.”
As the landscape of health insurance continues to evolve, the decisions of small business owners like Chalakani will play a crucial role in shaping the future of healthcare access and affordability across the United States.
