New York’s Individual Market is Headed for Disaster under the OBBBA
June 30, 2025 |
A recent Hochul administration analysis suggests that premium costs would rise by 38 percent for many consumers. The reality could be much worse.
Introduction
The Hochul administration released analysis last week showing that the “One Big Beautiful Bill Act” (OBBBA) – the federal budget that recently passed the U.S. House – would decrease Premium Tax Credit subsidies for those who purchase health insurance on the individual market, increasing costs by 38 percent on average for those receiving subsidies, or $2,736 per year for a married couple. Separately, the Hochul administration projects that different provisions in the OBBBA could result in as many as 80,000 consumers leaving New York’s already relatively small individual market, a decline in enrollment of over 30 percent.
These figures already paint a dire picture, and yet they understate the true threat to New York’s individual market, which currently covers 225,000 New Yorkers. The combined impact of rising premiums and a shrinking marketplace, which the State’s analysis does not examine, could result in an individual marketplace that is older and sicker – raising premiums dramatically for all enrollees, including those who do not receive subsidies. In a worst-case scenario, the individual market could enter a “death spiral,” in which higher premiums lead to more people leaving the marketplace, which in turn leads to even higher premiums. The OBBBA could threaten one of the signature accomplishments of the ACA: Creating a viable individual insurance market in which middle-class people can purchase high-quality insurance at a reasonable price.
New York’s Individual Market is Headed for Disaster under the OBBBA
June 30, 2025 |
A recent Hochul administration analysis suggests that premium costs would rise by 38 percent for many consumers. The reality could be much worse.
Introduction
The Hochul administration released analysis last week showing that the “One Big Beautiful Bill Act” (OBBBA) – the federal budget that recently passed the U.S. House – would decrease Premium Tax Credit subsidies for those who purchase health insurance on the individual market, increasing costs by 38 percent on average for those receiving subsidies, or $2,736 per year for a married couple. Separately, the Hochul administration projects that different provisions in the OBBBA could result in as many as 80,000 consumers leaving New York’s already relatively small individual market, a decline in enrollment of over 30 percent.
These figures already paint a dire picture, and yet they understate the true threat to New York’s individual market, which currently covers 225,000 New Yorkers. The combined impact of rising premiums and a shrinking marketplace, which the State’s analysis does not examine, could result in an individual marketplace that is older and sicker – raising premiums dramatically for all enrollees, including those who do not receive subsidies. In a worst-case scenario, the individual market could enter a “death spiral,” in which higher premiums lead to more people leaving the marketplace, which in turn leads to even higher premiums. The OBBBA could threaten one of the signature accomplishments of the ACA: Creating a viable individual insurance market in which middle-class people can purchase high-quality insurance at a reasonable price.