As Congress debates the future of ACA subsidies, here’s how healthcare costs break down across employer plans, public programs, and the marketplace. 

Between now and the end of the year, Congress will make one of the most significant health care decisions in years: whether to extend the enhanced Affordable Care Act (ACA) premium tax credits that were originally enacted during Covid.  

The stakes are high. If the subsidies expire at the end of this month under current law, millions of Americans would see their insurance bills double overnight. Some families may have to choose between paying their rent or their hospital bills.  

But on the other hand, extending these subsidies – which were only created during the pandemic and were designed to be temporary – would cost the U.S. $350 billion over a decade. And there are valid concerns about fraud and abuse: in 2016, the Government Accountability Office found that 80% of its undercover “secret shopper” applicants were able to obtain subsidized coverage on ACA exchanges using false information. 

All of this is unfolding at a time when healthcare costs continue to rise. One complicating factor in this debate is that most Americans don’t have a clear view of what health care or health insurance actually costs, or who really pays for it. In fact, the average American consumes a lot more healthcare than they pay for:
 

This chart puts the differences side-by-side. But nearly all types of insurance plans have one thing in common: someone else picks up the tab. For workers with employer-sponsored health insurance, their company pays most of the true cost. People on Medicaid, the Children’s Health Insurance Program (CHIP), and Medicare have most of their costs covered by their state and federal government.  

The government also pays for most of the cost of ACA plans that qualify for enhanced premium tax credits, for now. If the subsidies expire, the average person with an ACA plan will pay for most of their health care.  

In recent years, health care costs have been rising even faster than inflation. All told, America spent $13,740 per person on health care in 2023, compared to $12,300 in 2016 (adjusting for inflation). That’s a 12% increase. 

But at the end of the day, consumers aren’t feeling the full brunt of that jump. Household health spending – which includes premiums, co-pays, and other out-of-pocket payments – went up 6% between 2016 and 2023. Employers spent about 9% more on health coverage over the same stretch. 

Government spending on health care, however, has grown the fastest. Federal, state, and local governments now spend nearly $1,000 more per person on health care than they did in 2016 – a 16% increase, even after adjusting for inflation. 

Health care is already the largest category of government spending. If Washington is going to get a handle on the national debt and deficit, it cannot allow health care spending to grow this fast.  

And that’s the part Congress won’t be able to tackle before the holidays. Bringing down the underlying cost of care requires broader, bipartisan, bicameral work on prices, utilization, and the structure of the health system itself.  

That kind of effort takes time. It can’t be squeezed into a December deadline that was triggered by a government shutdown and lands in the middle of an already crowded legislative calendar. But this is exactly the kind of long-term, cross-party work many of No Labels’ allies in the House and Senate are trying to advance, and it will still be waiting for them once the immediate fight over ACA subsidies is resolved.