Shutdown’s End Doesn’t resolve Uncertainty Over Health Insurance Costs
WASHINGTON – The recent resolution to avert a government shutdown doesn’t address a looming issue for millions of Americans: the potential expiration of enhanced Affordable Care Act (ACA) subsidies at the end of the year. Without an extension from Congress, health insurance premiums are poised for notable increases in 2024, possibly leaving more people uninsured.
The subsidies, initially expanded under the American Rescue Plan Act of 2021, have kept health insurance affordable for many, particularly those who don’t qualify for conventional medicaid but still struggle with the cost of private plans.
Premiums are already slated to rise next year,but the loss of these subsidies will exacerbate the problem. Insurers are increasing premiums by an average of 30% in states using HealthCare.gov, and 17% in states running their own marketplaces, according to a KFF analysis published in late October. Without the additional tax credits, some individuals could see premiums jump by an average of 114%, the KFF analysis found.
“In some ways, this is a debate happening six months too late,” said josh Graves, a senior fellow and director of research and data analysis on the health policy team at the Center on Budget and Policy Priorities, a nonpartisan research group, “because the insurers have already set their rates kind of under the assumption that these may expire. And so, they set rates to reflect the risk pool that they were expecting.”
The Congressional Budget Office (CBO), a nonpartisan government group, projects that 3.8 million people, on average, will lose coverage and become uninsured over the next eight years if the subsidies are not extended. keep Americans Covered, a coalition of insurers and health industry groups, warned that failing to act will have “a real and devastating price” for individuals.
Even with the potential loss of enhanced subsidies, those earning under four times the federal poverty line – roughly $62,600 for an individual and $128,600 for a family of four - would still qualify for standard ACA subsidies, explained Karen Cox, a senior fellow at the Center on Budget and Policy Priorities.
some may opt to switch to bronze plans, which have lower monthly premiums but higher deductibles. However, experts caution against going uninsured, particularly for those with pre-existing health conditions.
Republicans are considering alternatives, including redirecting funds to consumers for use in tax-advantaged flexible spending accounts (FSAs) or health savings accounts (HSAs). Though, KFF health policy expert Larry Levitt noted, “it’s hard to tell exactly how these concepts of replacing ACA premium assistance with cash or health accounts would realy work in practice.”
