In the early trading on Monday, the stock prices of American health insurance companies collectively rose, following reports that the White House is preparing to announce a policy framework to extend the premium subsidies under the Affordable Care Act (ACA), also known as Obamacare, by two years and introduce new eligibility restrictions.
The current ACA subsidies are set to expire on December 31, and without an alternative plan, millions of policyholders could face a significant increase in premiums.
Health insurance companies have been preparing for the uncertainty of sharp premium increases and a potential decline in enrollment in 2026. According to Politico, the White House could announce the related plans as early as Monday to mitigate these risks.
In early trading on Monday, healthcare giants like Centene saw their stock prices rise by around 7%, Molina Healthcare by about 4%, and Elevance Health by over 2%.
Reuters reported that James Harlow, Vice President of Novare Capital Management, stated that a two-year extension means maintaining the current policies, which is better than expected for health insurance companies.
Analyst Michael Wiederhorn from Ovumhofer Corporation mentioned in a report that despite the reports being in early stages, significant adjustments could still be made in the future, which would be beneficial for healthcare services including hospitals, medical management organizations, and related businesses.
Stock prices of hospital operators like HCA Healthcare rose by 3.2%, Universal Health Services by nearly 2%, and Tenet Healthcare surged by 6%.
Public support for extending tax deductions remains robust. A recent poll indicated that about three-quarters of American adults support prolonging these deduction policies.
Previously, the disagreement between the two parties on delaying the ACA led to the longest government shutdown in history, which also helped the Democratic Party win in the November elections.
The ACA was established in 2010. The Biden administration further expanded the ACA subsidy program during the COVID-19 pandemic, which is scheduled to expire by the end of 2025.
Democrats hope to extend it at least until the mid-term elections in 2026. The Kaiser Family Foundation projected that without Congressional action, patients enrolled in ACA plans would see a 75% increase in out-of-pocket premiums on average.
Republicans expressed willingness to address the issue but preferred to postpone it until the end of the year, pointing out that the subsidies are set to expire on January 1, 2026.
Democrats opposed this timeline, stating that the open enrollment period for ObamaCare would begin on November 1, 2025, necessitating an early extension of tax deductions. They argued that if Congress doesn’t act promptly, patients might opt for insurance with narrower coverage or even go without insurance altogether.
During the government shutdown, President Trump proposed directly giving money to the people, enabling Americans to purchase the quality health insurance they desire, rather than allocating funds to health insurance companies.
However, to date, the Republicans have not put forth an alternative bill for the ACA healthcare system.