As congressional Democrats and Republicans continue their longstanding sparring over the future of the Affordable Care Act (ACA), a new complication has emerged. Currently, as open enrollment is in full swing, lawmakers are engaged in heated discussions about extending the crucial subsidies that have provided consumers with additional assistance in paying their health insurance premiums in recent years.
This ongoing debate has generated significant consumer anxiety regarding potential increases in health care costs. A recent KFF poll revealed that approximately half of current enrollees who are registered to vote indicated that if their overall health care expenses—such as copays, deductibles, and premiums—increased by $1,000 next year, it would profoundly affect their voting decisions in the upcoming midterm elections.
Many individuals find themselves caught in the middle of this political impasse, including consumers and leaders from the 20 states, along with the District of Columbia, that manage their own ACA marketplaces. "Before I sign up, I will wait and see what happens," stated Daniela Perez, a 34-year-old education consultant from Chicago. Perez expressed her concerns that her current health insurance plan could rise to $1,200 a month from about $180 if the tax credits are not extended. "I'm not super hopeful. It seems like everything is in gridlock," she added.
On December 11, a Senate vote was conducted as part of an agreement to end a recent government shutdown. The proposal aimed to extend the subsidies, while another option advanced by Republicans included funding for health savings accounts (HSAs). Unfortunately, neither proposal garnered the 60 votes required for passage.
On the House side, Speaker Mike Johnson is expected to introduce a narrow legislative package that addresses the root causes of rising health care costs. This package may include expanded access to association health plans, appropriations for cost-sharing reduction payments to stabilize the individual market, and increased transparency for pharmacy benefit managers. However, like the Senate's proposal, it does not include an extension of the ACA's enhanced subsidies.
Democrats are advocating for the continuation of the more generous subsidies that were introduced in response to the COVID-19 pandemic, which are set to expire at the end of the year. Meanwhile, Republicans are divided; many oppose a straightforward extension due to concerns about the costs and the broader implications of supporting the ACA, which some members view as a problematic piece of legislation. However, a few Republicans are open to proposals that would extend the tax subsidies, fearing political repercussions in the next midterm elections if they fail to act.
With open enrollment deadlines approaching, consumers urgently need clarity. Individuals must choose their ACA plans by Monday for coverage to commence on January 1. Open enrollment in most states extends until January 15 for coverage starting February 1. ACA marketplaces are also preparing contingency plans to adapt to potential Congressional decisions, which could take days or weeks to implement. "We have a plan on the shelf to update the website and notify consumers of any changes," said Audrey Morse Gasteier, executive director of the Massachusetts Health Connector.
As of early December, the Centers for Medicare & Medicaid Services (CMS) reported 949,450 new sign-ups across federal and state marketplaces during the first month of open enrollment. This figure represents a slight decline compared to the previous year's early enrollment total of 987,869. However, returning customers have increased, with approximately 4.8 million individuals already selecting their plans for the next year, up from 4.4 million at the same time last year.
Experts suggest that the early enrollees may be those who require coverage for chronic conditions or urgent medical needs, indicating a more motivated consumer base at the beginning of the enrollment period. Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms, noted, "The rubber meets the road when people have to pay the first premium."
Affordability remains a significant issue, particularly in states like Pennsylvania, where there has been a 16% decrease in first-time sign-ups compared to the previous year. For every new enrollee, 1.5 existing customers canceled their plans, with many cancellations occurring among individuals earning between 150% to 200% of the federal poverty level.
In California, new enrollments have dropped by 33% in the same period. Jessica Altman, executive director of Covered California, noted a trend of consumers opting for lower-cost bronze-level plans, which come with higher deductibles. The average bronze plan deductible will be $7,476 next year, a stark contrast to the $5,304 average for silver plans, according to KFF.
If the enhanced tax credits expire, ACA subsidies will revert to pre-pandemic levels, meaning households will pay a percentage of their income toward premiums, with tax credits covering the rest. The enhanced subsidies had significantly lowered the amount that low-income individuals had to pay, with some paying nothing at all. In contrast, next year, those in the lowest income brackets will face premiums of at least 2.1% of their household income, while higher earners could pay nearly 10%.
Individuals earning over four times the federal poverty level will no longer qualify for subsidies, leading to steep increases in coverage costs. Debra Nweke, a 64-year-old retiree from Southern California, shared her experience of seeing her coverage costs potentially rise from $1,000 to $2,400 monthly without the extended subsidies. "How can you have health insurance that is more than your rent?" she lamented.
Senate Majority Leader John Thune emphasized the need for a solution that effectively lowers health care costs without allowing high-income earners to qualify for government subsidies. The ongoing challenges faced by consumers, including rising premiums and fewer options, highlight the critical need for legislative action. As individuals like Andrew Schwarz and Debra Nweke prepare for the possibility of increased costs, the urgency for a resolution grows stronger.
In summary, the future of the Affordable Care Act and its subsidies remains uncertain as both parties grapple with differing policy positions. The clock is ticking for consumers, and immediate clarity is essential as they navigate their health coverage options amidst a complex political landscape.