The gridlock in Congress has left millions of people with state marketplace insurance in limbo.
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In the months leading up to the expiration of health insurance subsidies, state health insurance commissioners warned Congress that premiums for millions of middle-class Americans would likely double or triple.
There is currently a stalemate in Washington. The government has shut down.
Democrats say Congress needs to permanently extend the credit now, before open enrollment in the state’s health insurance market opens on Nov. 1. Republicans have not discussed health care policy as part of the government reopening bill, insisting they can address the subsidies before they expire on Dec. 31.
However, the reality on the ground is that people have already been informed of the expected cost increases. Insurers will submit rates and open enrollment will open within a month, leaving little time to adjust.
“People are aware of the December 31st date, but the reality is that people are making decisions within weeks of now,” said Devon Trolley, executive director of Penny, a Pennsylvania insurance marketplace.
Troley said it would be “chaotic” and “chaotic” if Congress waited to act until after the public offering began, and it would be even worse if it waited until the end of the year.
“The cleanest, most cost-effective and most profitable time to do this is now, before the public offering begins,” she said.
Even if Congress takes action to extend tax subsidies later this year or early next year, insurance commissioners fear losses will be incurred and at least hundreds of thousands of Americans will become newly uninsured.
The shock didn’t creep up on me.
The National Association of Insurance Commissioners sent four letters to Congress this year, and members made numerous in-person visits imploring leaders of both parties in the Senate and Democratic Party to take action.
“It didn’t sneak up on us,” Oklahoma Insurance Commissioner Glenn Mulready said. He chairs the association’s Health Insurance and Managed Care Committee.
In months of talks with Congress, the association asked representatives and senators to scale back the subsidies for at least a few years to give people time to find a way to pay for the increases. Instead, they’re facing a cliff, Mulready said.
John Godfred, president of the association and North Dakota Insurance Commissioner, said state commissioners told delegates what the costs would be for each state if the enhanced subsidies were not extended.
“I don’t know of a single insurance commissioner, red state or blue state, wherever elected or appointed, who wouldn’t support the continuation of these tax credits,” Godfred said.
Until recently, he says, the deadline felt far away. Getting Congress to listen was difficult.
“I feel like I spent the entire month of May in Washington, D.C., talking to Congress about this issue,” Godfred said. “As with everything in Washington, D.C. these days, we will have to wait until the last minute to make any move on this issue.”
Troley, of Pennsylvania, said he asked Congress for certainty to give insurance companies and consumers time to plan.
“Parliamentary carriages are passing one after the other without any updates. It’s like the last train leaving the station before people make a decision,” she said.
Congress is fighting over health care and perhaps starting to compromise
Democrats say they are using one of their few opportunities as the minority party to push back on Republicans’ recent health care reforms. Democrats also want to undo the massive Medicaid cuts made this summer in the Republican tax and spending bill.
Republicans say Democrats are holding the government hostage over issues that don’t need to be resolved in the midst of a crisis, and that a debate over what to do with the subsidies can wait.
“We’ve effectively had three months to negotiate, which feels like an eternity in the White House and in Congress,” House Speaker Mike Johnson, Republican of Louisiana, told MSNBC’s Ali Vitali on October 6.
There is some movement behind the scenes. A bipartisan group of senators has quietly begun meeting to find a way forward, and cracks are beginning to appear in the Republican position.
On October 6, Georgia Republican Rep. Marjorie Taylor Greene, who opposes the Affordable Care Act, broke with House leadership in support of extending the subsidy.
That same day, President Donald Trump suggested to reporters that subsidies could be a bargaining chip in reopening the government.
President Trump said, “Negotiations are underway with the Democratic Party and could lead to a good outcome.” “And I’m talking about the good things when it comes to healthcare.”
Godfred expects Congress to extend the subsidies before the open enrollment opens in most states on Nov. 1, or at least early in the admissions window.
“The challenge we face now is the timing of everything,” Godfred said. “We are meeting absolute deadlines.”
Subsidized health insurance for 24 million Americans is in jeopardy
The enhancements to the premium tax credit come as Congress expanded eligibility for subsidies to buy insurance on the marketplace to help as many Americans as possible buy insurance in the wake of the coronavirus pandemic.
Enhanced tax credits increase subsidies for eligible individuals and expand eligibility to include those with incomes at least four times the federal poverty level. In 2025, that amount will be $62,600 for an individual and $124,800 for a family of four.
Americans flocked to buy insurance with subsidies. The number of people buying insurance through the Marketplace has more than doubled since 2020, according to KFF, a nonprofit health policy institute. The majority of users live in states that voted for Trump in 2024, including Florida, Georgia and Texas, according to KFF, a nonprofit health policy institute.
According to KFF, about 92% of the 24.3 million Americans who use the marketplace receive some kind of subsidy. If Congress does not act and the credit expires at the end of 2025, out-of-pocket premiums would rise by more than 75% on average.
Set two rates
Because of the uncertainty, many states required two sets of rates from insurance companies. One if the enhanced subsidy ends. The other is if Congress acts to extend them.
“We actually planned around the Sept. 30 stay-at-home order,” said Jessica Altman, executive director of Covered California.
The non-enhanced subsidy rate was put into the system when the government closed that day and California began mailing personalized updates, including estimated costs without the subsidy enhancement, to the 2 million people who purchase insurance through the marketplace.
“If you think about this from a consumer perspective, by the time they understand this impact and are making decisions based on that impact, it’s not just happening in November, they’re actually starting to know about it in October,” she said.
In Oklahoma, “we’ve held back a little bit from really educating consumers and hoping and thinking that something might change or something might happen. But in our state, that wait is over. We have to tell people,” Mulready said.
Insurers determined premiums with the expectation that with low or no subsidies, younger, healthier people would become uninsured, leaving older, less healthy people with chronic conditions and more severe health needs, making them more expensive to insure.
“People who need health insurance because their lives literally depend on it. It’s their cancer treatment, it’s the medicine that keeps their attacks under control. It’s literally a matter of life or death whether they stay on their health insurance or not. They’ll find a way to stay on their health insurance and they’ll stay on their insurance,” Troley said.
Without enhanced subsidies, most people who purchase through the marketplace would pay twice as much, if not more. KFF has a calculator that people can use to estimate how costs will vary based on state, zip code, income, and family size.
“We expect that significant increases in premiums will force people to make tough decisions as early as (November 1) that they cannot afford to continue their insurance into 2026,” Troley said.
Who uses the Marketplace?
According to KFF, about half of its users are small business owners, self-employed people, and people working for small businesses.
“By definition, employers pay the majority of health insurance premiums and serve people who don’t have the privilege of a type of employment that provides stable benefits,” Altman said. That includes parents with young children who work part-time in the gig economy, entrepreneurs and early retirees who are too young for Medicare, she said.
Godfred said he emphasized to the North Dakota delegation that farmers, ranchers, small business owners and their employees make up the majority of people buying on the exchange. They cannot receive health care through other means, such as through their employer, Medicare, Medicaid or Tricare, he said.
“Many of the people these grants impact are the same people who keep our economy moving forward,” Godfred said.
Even if Congress acts quickly, delays and confusion are likely.
Troley said if Congress waits until after December to implement the subsidies, markets and consumers will face a lengthy and costly process.
If Congress extends the premium tax credit enhancement, lower interest rates offered by insurance companies could be implemented based on securing a larger consumer base, which would likely lower premiums for everyone shopping in the marketplace, not just those receiving the enhanced subsidy.
However, Trolley said it could take a month or two for the insurance company to enter the lower rate offered and notify the consumer that the rate has changed.
“It’s probably going to take January or February just to update everything and give people a chance to update their premiums and update their information,” Troley said. “It would be very confusing to do that after people have already made their choice. It would be very cumbersome.”
In some cases, Altman said, some people have already been dealing with the stress of difficult choices for weeks, if not months.
“They will begin to reorganize their household spending around paying higher health insurance premiums,” Altman said. Some people may have switched to a higher deductible plan. “And some consumers may walk away and say they can’t do that.”
Mulready said commissioners are concerned those people won’t return.
Mulready said Oklahomans expect at least a third of the 300,000 people who bought from the market last year to skip it this year.
Mr. Trolley estimates that 150,000 of the 500,000 people who use Penny will become uninsured without premium increases, and worries that market penetration will no longer be seen as reliable if subsidies are extended.
California expects 400,000 of the 2 million people on the market to leave, and although the state has set aside funds to bring them back through text messages, emails, letters and phone calls if Congress acts, Altman said he doesn’t think everyone will return.
“If we have a scenario where the tax cuts are extended in December or at the end of the year or early next year, we’re going to end up losing people with insurance, if for no other reason than Congress didn’t act sooner,” Altman said.
Sarah D. Wire, USA TODAY’s senior national political correspondent, can be reached at swire@usatoday.com.
