Biden’s healthcare plan, particularly its provisions related to the Affordable Care Act (ACA) and Medicare, has complex implications for retirees, and it could potentially raise costs for some of them. While the plan aims to expand coverage and make healthcare more affordable for many Americans, certain changes and expirations of subsidies may lead to increased out-of-pocket expenses for retirees, especially those relying on Medicare and ACA marketplace plans.
One key factor is the expiration of enhanced premium tax credits for ACA marketplace plans at the end of 2025. These subsidies, introduced during the COVID-19 pandemic and extended by Biden’s administration, have significantly lowered premiums for millions of Americans, including some retirees under 65 who purchase insurance through the ACA exchanges. Without these enhanced credits, premiums could rise sharply—by as much as 75 percent on average—making insurance less affordable for many, including older adults who are not yet eligible for Medicare or who rely on supplemental coverage through the ACA marketplace. This could force some retirees to pay substantially more for their health insurance or risk losing coverage altogether.
For those on Medicare, costs are also expected to increase. Medicare Part B premiums, which cover doctor visits and outpatient services, are projected to rise by around 11.6 percent, and Medicare Part D premiums for prescription drugs could increase by up to $50 per month. These hikes will directly impact retirees, many of whom live on fixed incomes, increasing their healthcare expenses. Additionally, the recent budget reconciliation law signed in 2025 includes significant federal Medicaid spending cuts over the next decade, which could reduce coverage and access to care for millions of older adults who depend on Medicaid for long-term care and other services. This reduction in Medicaid support may indirectly increase costs for retirees who rely on these services or who might have to pay out-of-pocket for care previously covered by Medicaid.
Moreover, the reconciliation law also contains provisions that could reduce the number of people with ACA marketplace coverage, including those aged 50 to 64, potentially pushing some retirees into more expensive or less comprehensive plans. While the law includes some measures to control healthcare costs, such as reforms targeting the drivers of rising medical prices, these may take time to materialize and may not offset the immediate cost increases faced by retirees.
Retirees already face substantial healthcare expenses. For example, a healthy 65-year-old couple retiring today is estimated to need nearly $388,000 in savings to cover future healthcare costs, including Medicare premiums, out-of-pocket expenses, and prescription drug
