Introduction to the Affordable Care Act
Josefina Muralles works a part-time overnight shift as a receptionist at a Miami Beach condominium so that during the day she can care for her three kids, her aging mother, and her brother, who is paralyzed.
She helps her mother feed, bathe, and give medicine to her adult brother, Rodrigo Muralles, who has epilepsy and became disabled after contracting covid-19 in 2020.
The Importance of Obamacare for Low-Income Families
“He lives because we feed him and take care of his personal needs,” said Josefina Muralles, 41. “He doesn’t say, ‘I need this or that.’ He has forgotten everything.” Though her husband works full time, the arrangement means their household income is just above the federal poverty line — too high to qualify for Florida’s Medicaid program but low enough to make Muralles and her husband eligible for subsidized health insurance through the Affordable Care Act marketplace, also known as Obamacare.
The Impact of Expiring Subsidies on Health Insurance Premiums
Next year, Muralles said, she and her husband may not be able to afford that health insurance coverage, which has paid for her prescription blood thinners, cholesterol medication, and two surgeries, including one to treat a genetic disorder. Extra subsidies put in place during the pandemic — which reduced the premiums Muralles and her husband paid by more than half, to $30 a month — are in place only through Dec. 31. Without enhanced subsidies, Affordable Care Act insurance premiums would rise by more than 75% on average, with bills for people in some states more than doubling, according to estimates from KFF, a health information nonprofit that includes KFF Health News.
States Most Affected by the Expiration of Subsidies
Florida and Texas would be hit especially hard, as they have more people enrolled in the marketplace than other states. Some of their congressional districts alone, especially in South Florida, have more people signed up for Obamacare than entire states. Like many of the more than 24 million Americans enrolled in the insurance marketplace this year, Muralles was unaware that the enhanced subsidies are slated to expire. She said she cannot afford a premium hike because inflation has already eaten into her household’s budget.
The Effect on Low-Income and Middle-Income Enrollees
Low-income enrollees like the Muralles couple would see the biggest percentage increases in premiums if enhanced subsidies expire. Middle-income enrollees who earn more than four times the federal poverty line would no longer be eligible for subsidies at all. Those middle-income enrollees (who earn at least $62,600 for a single person in 2025) are disproportionately older, self-employed, and living in rural areas.
The Perspective of Small Business Owners and Health Care Advocates
Julio Fuentes, president of the Florida State Hispanic Chamber of Commerce, said many of his organization’s members are small business owners who rely on Obamacare for health coverage. “It’s either this or nothing,” he said. Lauren Aronson, executive director of Keep Americans Covered, a group in Washington, D.C., representing health insurers, hospitals, physicians, and patient advocates, said it is critical to raise awareness about the likely impact of losing the enhanced subsidies, which are also known as advanced premium tax credits.
Potential Consequences of Letting Enhanced Subsidies Expire
The Congressional Budget Office estimated that letting the enhanced subsidies expire would, by 2034, increase the number of people without health insurance by 4.2 million. In tandem with changes to Medicaid in the House of Representatives’ reconciliation bill and the Trump administration’s proposed rules for the marketplace, including toughening income verification and shortening enrollment periods, it would increase the number of uninsured people by 16 million over that time period. A study by the Urban Institute, a nonprofit think tank, found that Hispanic and Black people would see greater coverage losses than other groups if the extra subsidies lapse.
The Need for Congressional Action
Kush Desai, a White House spokesperson, said the rules proposed by the Trump administration, combined with the provisions in the House-passed budget bill, would “strengthen the ACA marketplace.” But Aronson said it is critical to extend the enhanced subsidies to avoid a significant increase in the number of uninsured people. Brian Blase, president of Paragon Health Institute, a conservative health policy think tank, said the enhanced subsidies were supposed to be a temporary measure during the covid-19 pandemic to help people at risk of losing coverage.
Conclusion
The expiration of enhanced subsidies for Affordable Care Act plans could lead to a significant increase in health insurance premiums, making it difficult for low-income and middle-income families to afford coverage. It is essential for Congress to take action to extend these subsidies and ensure that millions of Americans do not lose their health insurance coverage. The consequences of inaction could be severe, with a significant increase in the number of uninsured people and a worsening of health outcomes.
FAQs
- What are the enhanced subsidies for Affordable Care Act plans?
The enhanced subsidies are temporary measures put in place during the pandemic to help people at risk of losing coverage. They reduce the premiums paid by low-income and middle-income families. - What happens if the enhanced subsidies expire?
If the enhanced subsidies expire, Affordable Care Act insurance premiums would rise by more than 75% on average, with bills for people in some states more than doubling. - Which states would be most affected by the expiration of subsidies?
Florida and Texas would be hit especially hard, as they have more people enrolled in the marketplace than other states. - What is the potential consequence of letting enhanced subsidies expire?
The Congressional Budget Office estimated that letting the enhanced subsidies expire would, by 2034, increase the number of people without health insurance by 4.2 million. - What can Congress do to address this issue?
Congress can extend the enhanced subsidies to ensure that millions of Americans do not lose their health insurance coverage.
