TL/DR –
If a federal pandemic-era subsidy is not renewed, health insurance premiums for people utilizing the Affordable Care Act (ACA) marketplace could increase by $865 a month, with middle-income residents seeing their rates more than triple. The potential rate hikes are particularly extreme in Tompkins County, New York, where a single adult earning $65,000 could experience a 313.9% cost increase. On a national level, 92% of the roughly 24 million people who use the ACA have their healthcare costs at least partially offset by the subsidy, which is a contentious point in the ongoing federal government shutdown.
ACA Subsidy Expiry Could Spike Health Insurance Premiums
Health insurance premiums of Affordable Care Act (ACA) marketplace customers could see a possible $865 increase per month if the federal pandemic-era subsidy is not extended, with mid-income residents possibly facing more than triple their rates next year, especially in Tompkins County, New York, according to state data analyzed by Senator Kirsten Gillibrand’s office.
This potential rate hike is a contentious point underlying the ongoing federal government shutdown. The Democrats are firm on their stance to back a federal funding bill only if it addresses the subsidy, which underwent expansion in 2021 as a part of federal pandemic relief programs.
Around 92% of the estimated 24 million people nationwide who avail health insurance via ACA marketplaces, have their healthcare costs partially covered by this subsidy. In New York, this program currently caps the offset in monthly healthcare costs by approximately $865 this year, or $434 on average.
In the event that the subsidy is not extended, a single adult in Tompkins County earning $65,000 would face a 313.9% cost increase while keeping the cheapest existing health plan from the state healthcare marketplace, excluding any potential increase in premiums next year. For an individual earning around the county’s median income, which is $37,800 in 2023, the subsidy completely covers the monthly premium for the most affordable plan. Without the subsidy, this individual would be required to pay around $850/month to maintain the same plan.
When it comes to the number of people impacted, New York is better off than nearly all other states according to Albany-based Empire Center’s study. Only 0.6% of New York’s total population receive the tax credit, as opposed to 6.4% nationwide. As per the last month’s data, just above 1,000 people in Tompkins County depend on the marketplace for health insurance plans.
Senator Gillibrand stated that the tax credit had increased the number of Americans on health insurance and lapses could undo that progress. She emphasized that these potential increases could force some New Yorkers to forego insurance, gambling on their health. Middle-income working adults who don’t qualify for Medicaid or New York state’s heavily subsidized Essential Plan but can’t get insurance through their employers, are the ones who rely heavily on marketplace insurance in New York.
Even if the subsidy is extended at its current level, analysis by the Kaiser Family Foundation healthcare research organization indicates that some may still see increases in their monthly premiums due to price hikes by insurance companies. They suggest marketplace plans could see a median 18% increase in premium cost. With the government shutdown continuing into its third week, and multiple failed proposals for a stopgap funding measure, the future of this subsidy remains uncertain.
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