Secure Health Insurance for January Coverage by Tomorrow

If you haven’t picked a Health Insurance Marketplace (Obamacare) plan for 2025 yet, you still have two days to do it. Healthcare.gov has extended the deadline from Dec. 15 to Dec. 18 for insurance coverage that begins Jan. 1, 2025.

Premiums Have Risen, but Out-of-Pocket Maximums Are Down

While the cost of health insurance premiums has generally increased for 2025 plans, the amount varies by state and plan level. For example, many southern and midwestern states have seen price decreases in their silver-level plans, while those in the West and Northeast have experienced price hikes. 

Although premiums have risen, the average maximum out-of-pocket (MOOP) amount has gone down. The MOOP is the most enrollees will have to spend on covered services before the insurer covers all eligible expenses. The average out-of-pocket maximum for an individual in 2025 is $8,277, down from $8,504. Family plans will see an even larger decrease from $17,009 to $16,556.

How to Reduce Insurance Costs

To get the most affordable health care coverage, compare plans to find an insurer and plan level that meets your needs. Just as important is to see what government subsidies you may qualify for.

Most Marketplace enrollees (92% nationwide) qualify for subsidies through a premium tax credit (PTC). Enrollees can either have tax credit funds distributed to the insurer throughout the year to reduce their premium costs (known as the advance premium tax credit) or pay their full insurance premiums and receive the tax credit with their tax refund. 

In many cases, the PTC offsets the increase in premium prices and, depending on your household income level, it may cover the cost of the premium entirely. Four out of five Marketplace enrollees can find coverage for $10 or less per month thanks to federal subsidies. Some states offer subsidies as well.

Premium Tax Credit Enhancements Are Set to Expire After 2025

The premium tax credit subsidies for Health Insurance Marketplace plans were created under the Affordable Care Act, often referred to as Obamacare. This helped millions of Americans get access to affordable insurance coverage. 

The rate of health insurance coverage has been climbing since then, nearly doubling from 2021 to 2024. This is partly due to enhancements made to the premium tax credit by the American Rescue Plan of March 2021, which capped Marketplace plan health insurance premiums at 8.5% of income and allowed millions more to qualify for reduced-cost coverage.

Unless Congress extends these benefits, the American Rescue Plan’s improvements to premium tax credits expire at the end of 2025. Depending on household demographics, this could result in premium increases between 27% and 258%.

How to Apply for Coverage and Use Premium Tax Credits

To shop for Health Insurance Marketplace insurance plans, go to HealthCare.gov or your state’s marketplace website and apply. Once you complete your application, you can compare different plan vendors and coverage levels. 

When you apply for Marketplace coverage, the website estimates how much PTC you’re eligible for based on the information you provide on family size, projected household income, and other factors. 

You can choose whether to have some or all of your PTC credited to your insurance company to lower your monthly premium. The PTC amount shown is only an estimate, as your income and other factors may differ from your projections by the end of the year. 

If you claim the premium tax credit when you file your taxes, you’ll use Form 8962 to calculate what you’re owed.

Note that you’ll be responsible for any gap between your tax credit and the amount of your premium.