What does doubling ACA premiums mean for housing market buyers?

This is not my usual column, where I share an opinion (right or wrong) about what I’m writing about. Instead, I’m proposing an open question to our industry, as I’m neither an economist nor a health care expert.

The Issue

Most have heard that ACA insurance premiums could double for some households. My wife and I use ACA coverage and, embarrassingly, I had assumed the subsidies were only for low-income people. While that situation would be unfortunate, I didn’t realize how the system actually works—until now, painfully so.

The subsidy change involves removing the percentage cap on maximum payments. Previously, premiums were capped at 8.5% of your income even when you earned over 400% of the poverty level. For a family of two, the poverty level is $21,150, so at 4 times that amount ($84,600), there were technically no traditional subsidies. Still, there was a percentage cap—a different form of subsidy. It’s that cap that has expired.

Our insurance went from $1,600 per month to $3,100 per month (the doubling we’ve been hearing about). To be clear, we’re very fortunate that this is aggravating rather than a genuine crisis.  And to be fair, we live in a rural mountain area notorious for high health costs.  But the doubling is real all over.

The Question for Our Industry

This raises a significant question: since few people can easily spend this kind of money—let alone also afford to buy a house—what might this do to our buyer pool? I’ve asked some analysts in the business, and this issue seems to be flying under the radar, given our broader affordability challenges. I don’t know if this represents a material dent in potential demand.

Key Facts

Market Size:

• In 2025, approximately 24 million Americans were covered under ACA marketplace plans (not including Medicaid)
• An estimated 1.6-2.0 million people have incomes over the 400% poverty level threshold

Household Assumptions:

• We can reasonably assume we don’t sell many homes to households below the 400% poverty level ($84,600 for a family of two)
• There is no precise data available on the household size within this affected group
• Using demographic estimates of approximately 2.5 persons per household would suggest roughly 640,000-800,000 households in our potential buyer price range are impacted

Additional Considerations:

• Many in this group already own homes (facing stress on monthly payments)
• We’d need to estimate how many might be prospective buyers of new homes
• The actual impact depends on factors like age distribution, geographic location, and current housing status

The Bottom Line

As one homebuilder analyst said to me, “If you start multiplying probabilities, it’s likely very small.” I hope that’s the case, though we can’t afford to lose many potential buyers in today’s market.

Beyond the tragedy for families who clearly can’t afford $25,000-$35,000 per year in insurance premiums, what does this mean for our industry?

I’m seeking input: If you have thoughts on this issue or have seen credible analysis, I’d love to hear about it. Share your comments below.

Note: The enhanced ACA subsidies that eliminated the 400% FPL income cap and capped premiums at 8.5% of income expire at the end of 2025. Whether Congress will extend these provisions remains uncertain as of this writing.