Sep 29, 2025 —
In just a few months, many lower and middle-income families could start paying a lot more for insurance.
That’s because federal tax credits passed in the American Rescue Plan Act in 2021 are set to expire at the end of this year, and the Republican controlled Congress says it doesn’t plan to extend them.
It’s become a key point of contention in the looming government shutdown (which will begin on October 1 if a deal isn’t reached by midnight on September 30), with Democrats insisting the tax credits be extended before they’ll vote for a short-term funding extension.
But what will the loss of the tax credits mean practically for New York and the North Country?
The origin of the ACA subsidies and who they assist
First, a bit of a history lesson. Most people have never heard of the Affordable Care Act Subsidies, even if they use them.
The subsidies were created as part of the passage of the Affordable Care Act, or Obamacare, in 2012.
The idea behind them was to help people pay for private insurance who were a) not able to access insurance through an employer, b) uneligible for Medicaid (making more than 133% of federal poverty level), but c) making less than 400% of the federal poverty level.
For a single person, making between 133% and 400% of the federal poverty level translates to someone making between around $15,000 and 60,000 a year. Insurance for a single person through a private insurer costs around $12,000 a year on average.
“$12,000 out of $60,000 is impossible,” said Chris Hoy, a retired physician who’s lived and worked in Northern New York for the last 34 years. His final decade in medicine he worked for a Hudson Headwaters Health Network clinic in Queensbury. “Especially in a country in which 40% of the people do not have $500 to meet an emergency car or medical expense.”
Hoy said the tax credits “became the way of allowing people to afford health care.” That was especially so for small business owners, their employees, and people who work multiple jobs.
A big expansion in 2021 that doubled the ACA marketplace
Then, the subsidies really ramped up.
The subsidies were expanded in 2021 under President Joe Biden, through the American Rescue Plan. That nearly doubled the number of Americans enrolled in ACA plans, and it got another 12 million Americans on health insurance. Enrollment has more than tripled in Texas, Mississippi, West Virginia, Louisiana, Georgia, and Tennessee.
Hoy says the the original subsidies and 2021 expansion had a big impact in New York, too.
They helped get New York’s uninsured rate from between 14% and 18% in the early 2010s (before the Affordable Care Act) down to a staggeringly low 5% in 2025. “Finally arriving at something that essentially is universal health care for people in New York State,” said Hoy.
In New York, about 140,000 people use ACA plans, and another 1.7 million are on the NY Essential Plan, which also uses ACA subsidies. But most people benefiting from an ACA subsidy don’t actually know they’re getting it.
And that’s because they’re not label as such, says Hoy. When you search for insurance through the NY Marketplace, you put it information like where you live, and your income, and it gives you choices; none of which have a big red sign saying: Medicaid.
“Now, the vast majority of people do not know that the marketplace is Medicaid,” said Hoy. “They don’t know that the NY Essential Plan is Medicaid. They don’t know that qualified health plans are Medicaid. They don’t know that Medicaid involves many different aspects.”
But that’s exactly what Republicans have said is the problem, that Medicaid has gotten too big and involves too many people.
Republicans want Medicaid pared down, Democrats want subsidies continued
They say it needs to revert back to it’s original mission, which was providing insurance for only the very poor and the disabled.
Cutting Medicaid back, including the expanded subsidies, was a central part of President Trump’s One Big Beautiful Bill.
Elise Stefanik, the North Country’s congressional representative, has said the cuts will reduce waste, fraud, and abuse in the Medicaid system. After local hopsital union groups protested the cuts, a Stefanik spokesperson responded with the statement that, “Republicans want to strengthen and secure Medicaid for eligible citizens.”
Democrats like NY Senator Chuck Schumer say the Affordable Care Act subsidies are playing a crucial role in supporting the overall health care system, and that without them, care will be inaccessible to many lower and middle income families.
“And if you don’t extend the Obamacare tax credits, people’s premiums are going to go up $400 or $500 a month. And they’re going to start learning about that when they get the notices in October,” Schumer said in an interview with PBS News Hour.
Governor Kathy Hochul recently joined 17 other governors in signing a letter asking Congress to extend the subsidies.
The letter says that “…for millions of hard-working Americans, these subsidies are the only reason health insurance is still within reach in a country where the cost of living keeps going up.”
What happens in NY when the subsidies expire?
The New York State Department of Health says the subsidies support around 1.9 million New Yorkers through NYS Marketplace plans and the NY Essential Plan.
If they expire, it estimates that average premiums statewide will rise by nearly 40%. That translates to a couple paying about $250 dollars more, per month, for their insurance.
“Which is $3,000 annually. That’s a big chunk,” said Duncan RyanMann, an Economics professor at SUNY Empire. He’s been studying and teaching healthcare policy for over 40 years.
He says the impacts of those raised premiums will go far beyond the people having to pay them, because of the choice it will force. “People will have to pay a higher price for health insurance, and that’s going to discourage people from buying it,” he said, especially younger, healthier people who are “willing to take the risk of going without insurance.”
That results is something referred to as ‘adverse selection’ in insurance, said RyanMann. “Which is that people that are less likely to need the insurance coverage will tend to opt out, versus those people that need the insurance coverage, and who tend to be older and sicker or who have exisiting conditions, will keep it,” he said.
That, in turn, makes the average medical cost per customer to insurers go up. Then the insurers past that cost on to the still-remaining customers, in the form of even higher monthly payments.
The threat of overall higher premiums and a larger uninsured population is a deeply unsettling prospect for rural healthcare systems, like the one that exists in Northern NY.
What happens in the North Country when the subsidies expire?
Chris Hoy, the former Queensbury physician, is now a member of the Healthcare Coalition for the North Country, a non partisan group that formed this spring, with a mission of preserving Medicaid in the region, where a third of the population depends on it.
He says the healthcare system is built on three pillars: commercial, Medicare, and Medicaid insurance. “And now one of those pillars is being knocked out, and it’s going to affect everything else,” said Hoy.
He says as people lose their subsidies, followed by some of them dropping insurance, that will end up stressing local hospitals, because uninsured people don’t seek primary or preventive healthcare.
“By the time it gets bad enough, they end up going and have a much more advanced stage of disease,” said Hoy, “having ignored these problems, they suddenly end up in an emergency situation and go to the emergency room. They have no insurance. The hospital is left with a great deal of uncompensated care.”
Hoy says one of the Coalition’s greatest concerns is that the elimination of the Affordable Care Act subsidies will be the first domino in Medicaid reductions, eventually forcing smaller hospitals in the region to reduce their services, or even close.
There are eight ‘critical access hospitals’ in the North Country, with less than 25 beds.
Hoy says the Healthcare Coalition for the North Country has determined those hopsitals are at a high risk of closing, because of small bed count and high Medicaid dependence. “You know, those eight hospitals are… highly dependent on Medicaid. And they’re likely going to close or going to cut services or become urgent care centers,” said Hoy.
They include Alice Hyde Medical Center in Malone, Elizabethtown Community Hospital, Little Falls Hospital in Herkimer County, Carthage Area Hospital, River Hospital in Alexandria Bay, Lewis County General Hospital in Lowville, Clifton-Fine Hospital in Star Lake, and Gouverneur Hopsital.
Subsidies’ role in the impending government shutdown
In recent weeks, The Affordable Care Act subsidies have become a focal point and bargaining chip in the potential government shutdown, which will start on Wednesday October 1 if Congress doesn’t pass a short term funding extension.
Democrats say they want the subsidies, which will currently expire at the end of 2025, extended. Top Republican leaders have ruled out dealing with the subsidies as part of a shutdown deal.
But for many working class people who don’t get insurance through their employers, another deadline is looming: November 1, when open enrollment begins for insurance plans.
With no change on the subsidies before then, many lower- and middle-income people will be in for some hefty sticker shock.
