85,000 Pennie customers dropped health plans as tax credits shrank and costs spiked

About 85,000 people who bought Pennie plans in 2025 did not renew for this year following the expiration of expanded tax credits that reduced what consumers had to pay, Pennsylvania’s Affordable Care Act marketplace announced Monday.

That meant that 18% of previously enrolled Pennsylvania residents dropped their coverage as premiums doubled on average across the state, according to Pennie, the state’s Obamacare marketplace.

Enrollment for 2026 totaled 486,000, down from 496,661 at the end of last year’s open enrollment period. For this year, roughly 79,500 newcomers to the exchange partially offset the people who dropped coverage.

The agency warned, however, that the number of enrollees could continue declining for several months. There’s a three-month lag between when consumers stop paying premiums and coverage ends. Open enrollment ended Jan. 31.

Pennsylvania already had more than 700,000 people without health insurance, according to the latest census data.

The agency had predicted last summer that as many as 150,000 people would drop coverage if Congress did not renew the expanded tax credits that were adopted in 2021 during the coronavirus pandemic.

New Jersey has not released final results for its ACA open enrollment period, which also ended Jan. 31.

As of the start of January, 493,727 residents were signed up for 2026 health coverage with Get Covered New Jersey. That’s up slightly from the 481,151 people who were enrolled last year.

Average out-of-pocket costs were expected to double on average for people who benefited from the enhanced tax credits, Pennie said last year.

Under the ACA, people who earn less than 400% of the federal poverty level — about $64,000 for an individual and $132,000 for a family of four — are eligible for tax credits on a sliding scale, based on their income, to help offset the monthly cost of an insurance premium.

That tax credit is part of the law, and therefore did not expire at the end of December. The change affects an expansion in 2021, when Congress increased financial assistance so that those buying coverage through an Obamacare marketplace do not pay more than 8.5% of their income.

The expiration of the 8.5% cap means that a 60-year-old couple with household income of about $85,000 could see their premium triple to $22,600 this year from $7,225 last year, according to the nonprofit Bipartisan Policy Center in Washington.

The tax credits were a key issue in the federal budget debate last year that ultimately led to the longest-ever government shutdown. Democrats wanted to permanently expand the enhanced subsidies, and Republicans refused.

About 33,000 more Pennie customers enrolled in plans that have lower monthly premiums, but typically come with high out-of-pocket costs in the form of deductibles and copays. That amounted to a 30% increase in the number of consumers choosing so-called Bronze plans, Pennie said.

“As the costs of groceries, housing, utilities, and other necessities continue to rise, higher healthcare costs mean more people will delay care, skip treatments, or take on medical debt,” Antoinette Krause, executive director of the nonprofit advocacy group Pennsylvania Health Access Network, said in an email.

Pennie noted that rural counties were particularly hard hit by coverage losses. Fifteen of the top 20 counties with the highest disenrollment on a percentage bases were rural, Pennie said.

That could put more stress on rural hospitals if people have to resort more often to emergency departments for care and don’t have the means to pay.

Inquirer staff writer Sarah Gantz contributed to this article.