Congressional Democrats and Republicans are currently engaged in discussions concerning the future of the Affordable Care Act (ACA).
A key issue is whether to extend health insurance subsidies, which have provided financial assistance to consumers in recent years. This ongoing debate during open enrollment has led to consumer uncertainty about future costs.
Consumer Impact and Polling Data
A KFF poll conducted in December indicated that approximately half of current ACA enrollees who are registered to vote stated that a $1,000 increase in annual health care expenses (including copays, deductibles, and premiums) would significantly influence their voting decisions in upcoming midterm elections or their party support. For example, Daniela Perez, an education consultant in Chicago, noted that her current plan could increase from $180 to $1,200 per month without an extension of tax credits, leading her to postpone signing up.
Congressional Actions and Proposals
- Senate: On December 11, the Senate voted on a proposal to extend the subsidies as part of an agreement to end a government shutdown. A separate Republican-backed option, which included funding for health savings accounts (HSAs), was also considered. Neither proposal achieved the 60 votes required for passage.
- House: Speaker Mike Johnson plans to introduce a legislative package aimed at addressing health care costs. This package would include expanded access to association health plans, appropriations for cost-sharing reduction payments to stabilize the individual market, and increased transparency requirements for pharmacy benefit managers. This proposal, like the Senate Republican bill, does not include an extension of the enhanced ACA subsidies. The timing for a potential vote on such an extension remains undetermined.
Party Positions
- Democrats: Generally favor extending the enhanced subsidies, which were introduced during the COVID-19 pandemic and are scheduled to expire at the end of the year.
- Republicans: Exhibit varied positions. Many express reservations about the cost of a direct extension and the policy implications of strengthening the ACA. Some Republicans support proposals to extend tax subsidies due to concerns about potential political repercussions in the upcoming midterm elections.
The White House has indicated general support for HSAs but has not publicly endorsed a specific plan from Capitol Hill.
Open Enrollment and Marketplace Observations
The open enrollment period for ACA plans required selections by Monday for January 1 coverage, and continues in most states until January 15 for February 1 coverage. State-run ACA marketplaces have contingency plans for potential congressional interventions, which could require website updates and consumer notifications. Audrey Morse Gasteier, Executive Director of the Massachusetts Health Connector, confirmed such a plan.
Jessica Altman, Executive Director of Covered California, noted that current legislative dynamics suggest a wider gap in agreement among lawmakers compared to several months prior.
Enrollment Data
The Centers for Medicare & Medicaid Services (CMS) reported December 5 figures for the first month of open enrollment:
- New Sign-ups: 949,450 new enrollees across federal and state marketplaces, a slight decrease from 987,869 during the same period last year.
- Returning Customers: Approximately 4.8 million existing customers had selected a plan for the next year, an increase from 4.4 million at the same time last year.
Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms, suggested that early returning customers might be those with chronic conditions or immediate health needs.
State-Specific Trends
- Pennsylvania: Pennie, the state's ACA marketplace, reported a 16% decrease in new sign-ups during the first six weeks compared to the previous year. For every new enrollment, 1.5 existing customers canceled. Data indicated that many cancellations occurred among individuals earning 150% to 200% of the federal poverty level ($23,475 to $31,300 for a single adult).
- California: Covered California reported a 33% drop in new enrollments through December 6. Jessica Altman observed an increase in consumers opting for "bronze"-level plans, which have lower premiums but higher deductibles. The national average deductible for bronze plans next year is $7,476, compared to $5,304 for silver plans, according to KFF.
- Massachusetts: The Massachusetts Health Connector reported a 7% increase in consumer calls during the first month compared to the previous year, with calls reflecting difficulties in maintaining coverage.
Subsidy Structure Without Enhanced Credits
If the enhanced tax credits expire, ACA subsidies would revert to pre-pandemic levels:
- Households would pay a percentage of their income towards the premium, with a tax credit covering the remainder, typically paid directly to the insurer.
- The enhanced subsidies had reduced the income percentage paid by consumers, eliminated payments for the lowest-income individuals, and removed an upper-income limit for qualification (though not all high earners received subsidies).
- Without enhanced subsidies, the lowest-income brackets would pay at least 2.1% of household income towards premiums, with the highest earners paying nearly 10%.
- Individuals earning more than four times the federal poverty level ($62,600 for an individual or $84,600 for a couple) would no longer qualify for subsidies. This could lead to significant cost increases for this group, as insurers have also raised premiums.
Debra Nweke, 64, from Southern California, stated that her coverage could increase from $1,000 to $2,400 monthly without subsidies. Andrew Schwarz, 38, a preacher in Bowie, Texas, noted his ACA coverage for himself and his wife would increase from $40 to $150 per month, partly due to choosing a lower-deductible plan. Senator John Thune stated in early December that Republicans seek solutions to lower health care costs but oppose providing government subsidies to high earners or free coverage to low-income individuals.