ACA enhanced tax credits may best be described as a “will they or won’t they” — will Congress extend them past the end of the year, or are they on track to expire?
While an extension could happen, the outcome is still up in the air. Several news sources reported that President Donald Trump was expected to share his plan for extending the subsidies soon, but he postponed the announcement. President Trump’s proposal would set an income cap, and all enrollees would have to make minimum premium payments.
Earlier this month, UnitedHealthcare said it would increase rates in its ACA business by 25% next year and anticipates losing two-thirds of its exchange membership due to the subsidy expiration.
Becker’s heard from a handful of other payer leaders over the past week, as well as health system executives, about what they think will happen — and how they are preparing for the possible fallout.
The gist: “While it’s hard to predict the outcome, the possibility that the enhanced subsidies could expire is real,” L.A. Care Health Plan CEO Martha Santana-Chin said.
What worries payers
Steeper premiums are one outcome of the potential expiration weighing on insurers.
Ms. Santana-Chin said about 90% of L.A. Care Covered members receive subsidies and almost two-thirds pay nothing in premiums as a result of the enhanced federal tax credits.
“For many members, even a $30 to $50 premium makes insurance unattainable for those living paycheck to paycheck. And many families will be forced to make impossible trade-offs between healthcare and basic needs, like groceries or gas,” she said. “If subsidies expire, we may see some members — especially healthier individuals — step away from coverage, destabilizing the risk pool and driving up costs further.”
In a separate statement, Health Care Service Corp. echoed Ms. Santana-Chin’s concern, saying it “expect[s] enrollment of healthier individuals to decline at a disproportionate rate, increasing costs for those who remain.”
Cost pressures are also complicating open enrollment for customers.
“In the midst of open enrollment, people are facing uncertainty. Some are seeing double or triple premium costs for the same plan they currently have. Some are wrestling with the decision to give up coverage entirely,” said Jeff Roe, president and CEO of Premera Blue Cross.
Community Health Plan of Washington CEO Leanne Berge also anticipates strain on community health centers.
And another worry: Potential cost-shifting.
“The expiration of the enhanced premium tax credits will likely have a ripple effect on the cost of healthcare for everyone, including corporate payers that will see cost-shifting from provider systems,” Mr. Roe said.
How insurers are preparing
Mr. Roe explained how Premera Blue Cross established a resource hub, including interactive quote tools, for people to engage with as they evaluate their plan options.
Martha Wofford, president and CEO of Blue Cross & Blue Shield of Rhode Island, said her “teams stand ready to help members navigate this confusing open enrollment period.” Ms. Santana-Chin said her team is offering one-on-one member support, as well.
“We’re watching federal discussions closely so we can act quickly if anything changes. We’re also preparing for all outcomes and making sure our members have clear guidance,” Ms. Santana-Chin said.
Along with providing enrollment support — such as by informing members about their most affordable plan option in their renewal notices — the Community Health Plan of Washington is collaborating with the state to prepare.
“We have been working closely with the state on their efforts to mitigate the impacts of the federal subsidies set to expire Dec. 31, 2025, including developing a new lower actuarial-value gold-level plan that is more affordable than the silver plan, and funding to continue state premium assistance for those who qualify,” Ms. Berge said.
HCSC said it will “continue to effectively manage [its] operating expenses, work with providers to improve quality of care, introduce programs to help improve members’ health and give them more information to assist in their healthcare decisions.”
