Idaho consumers are getting the nation’s first look at price increases hitting Affordable Care Act (ACA) marketplace plans as the federal tax credits that helped to trigger a government shutdown expire.
Idaho’s marketplace open enrollment began Oct. 15, as the future of enhanced premium tax credits remains in limbo. Marketplace customers will see markedly higher premiums than last year if the credits are not extended.
“On average, gross premiums, or the overall cost of the premium, has gone up about 10 percent. And the net premium, or the amount the consumer pays after the tax credit has been applied, has increased about 75 percent,” Pat Kelly, executive director of Your Health Idaho, told The Hill.
“So, those are averages across all of our enrollees, but it does give an indication of overall increase and then increase to what the consumer actually pays.”
The enhanced premium tax credits were created through the American Rescue Plan Act in 2021 and extended to the end of 2025 by the Inflation Reduction Act, enabling households with incomes higher than 400 percent of the federal poverty level to benefit from lowered premiums.
Kelly estimates that about 13,000 of the roughly 135,000 enrollees in Idaho’s marketplace earn more than 400 percent of the federal poverty level. If Congress takes no action, those individuals will no longer be able to receive credits, though projections indicate that the vast majority of this cohort will remain insured if that does occur.
Many Idahoans will be automatically reenrolled into their plans under their new rates, potentially leaving some people unaware of the upcoming spike in their monthly costs.
Access to tax credits won’t be affected by income alone — age and residency also factor into eligibility.
Premium tax credits are based on the second-lowest cost Silver plan in a customer’s area. Because younger customers typically pay less than older customers, they are more likely to be ineligible for the credits even if they make below 400 percent of the federal poverty level.
According to Gideon Lukens, director of research and data analysis on the health policy team for the Center on Budget and Policy Priorities, the difference that Idahoans will see does not “stand out as particularly large.” Giving the example of a 60-year-old couple in Idaho, Lukens noted they could expect an increase in their annual premium by $18,000, which is close to the expected average.
“There’s been about a dozen [state-based marketplace] states that have started window shopping, and the average increase for that same example couple is typically over $20,000 annually,” said Lukens.
Window-shopping periods have begun in more than a dozen states including California, Georgia, Kentucky, Nevada, Maryland and Maine.
The relatively moderate impact in Idaho reflects the reality that analysts have flagged throughout the ongoing fight over ACA tax credits: The impact will be different across states.
One significant factor is whether a customer lives in a state where Medicaid has been expanded. In expansion states, people making up to 138 percent of the federal poverty level are eligible for Medicaid. People in nonexpansion states who are ineligible for Medicaid coverage were particularly reliant on the ACA tax credits.
As the Urban Institute noted, states such as Mississippi, Tennessee and South Carolina are expected to see drastic jumps in their uninsurance rates if enhanced tax credits expire. And KFF found that certain congressional districts in Wyoming, West Virginia, Connecticut and Illinois would see the highest increases in their monthly premiums, ranging from 535 percent to nearly 700 percent.
“Where you see the big differences between states is where you get over 400 percent of the poverty level,” said Lukens. “Because when the enhancements expire, those people will now be paying the full premium, out-of-pocket bill, no longer have any cap on their income. So, then it will really depend on how much premiums cost … in the state.”
Premiums are also expected to rise as a result of worsening risk pools.
Lukens noted that healthier people are more likely to take the risk and go without coverage, making the remaining risk pool sicker on average. Risk pools for nongroup markets could also be affected as sicker individuals are pushed off their ACA plans and move to private plans.
Joel White, president of the Council for Affordable Health Coverage, noted some states have adopted a high-risk pool model, something Vice President Vance has endorsed and for which the ACA essentially eliminated the need.
“The risk pool basically is a pressure valve to take that high cost out of the market,” said White. “The consumer doesn’t see any difference, right? Like they’re still enrolled in an exchange plan. It’s just that when they hit a high cost like $50,000 in claims, that risk then gets thrown to the high-risk pool, which then does a reinsurance payment for those high-cost claims.”
“Those risk pools lowered premiums in those markets by an average of about 20 percent,” he added.
Kelly encouraged customers to get enrolled early and to take advantage of a no-cost, licensed agent or broker or who can help with enrollment. He noted about 71 percent of enrollments in Idaho’s marketplace are facilitated through these experts.
Despite the dire time constraints, Kelly said he would welcome extensions to the ACA tax credits at any time, saying, “We stand ready to move mountains, if needed, to make sure that Idahoans receive all the savings that they’re eligible for.”
