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The most generous subsidies for Affordable Care Act plans officially expired Wednesday, despite a months-long battle in Congress over a possible extension.
The fate of the subsidies was set in stone after lawmakers went on vacation without taking action to prevent expanded financial assistance, which has helped millions of Americans pay for insurance since the coronavirus pandemic, from ending.
Congress could still bring them back in the new year, an option backed by Democrats, who argue that resurrecting the enhanced subsidies is the only short-term measure to protect ACA enrollees from sharp increases in the cost of their health care.
Without the help, about 22 million ACA enrollees will see the amount they pay for coverage increase, and about 4 million Americans are expected to become uninsured.
Congress has committed to reconvening on health care affordability when lawmakers return to Washington on Jan. 6. Republicans in particular are in a difficult position to act, given that public support for the ACA’s enhanced subsidies could punish the party in November’s midterm elections.
A handful of moderate Republicans joined House Democrats before the recess to back a discharge petition forcing a vote on a three-year extension of the tax credits. Voting on the bill should be one of the House’s first orders of business in January.
But even if the House passes it, the extension faces an uncertain fate in the Senate. A similar extension failed to meet the 60-vote threshold to pass in December. Republicans generally oppose preserving the subsidies, pointing to the high cost to taxpayers and incidents of fraud on the exchanges.
President Donald Trump has also made no secret of his distaste for maintaining the most generous subsidies, smearing them as a handout to insurance companies.
Without action, the ACA “it’s just automatically revoked because no one will want to use it. Too expensive,” Trump said in an interview with NBC News on December 18.
Many in the Republican Party have washed their hands of the debate over ACA subsidies and instead support other options that they say will make health care more affordable, such as funneling federal dollars into tax-advantaged savings accounts or expanding alternative coverage options like association health plans or individual coverage health reimbursement arrangements.
Some of those policies, such as depositing the value of enhanced subsidies into a health savings account or requiring a small monthly premium for fully subsidized plans, would worsen health care affordability and enrollment, one study finds. expert survey by the Cornell Health Policy Center.
Without the subsidies, out-of-pocket premiums will double on average this year, according to estimates by health policy research group KFF. That breaks down to more than $1,000 per person per year. And almost three-fifths of those registered in the market say that will not be able to afford a $300 increase in their health care costs, according to a recent survey by the group.
Without quick action by Congress, with each passing day “more and more ACA Marketplace enrolled “They’re going to drop their health insurance when faced with staggering increases in their premium payments,” said Larry Levitt, executive vice president of health policy at KFF. he wrote last month.
Still, early enrollment in ACA plans has remained high, despite the swings over subsidies. Some 5.8 million people signed up for ACA coverage in the first month of open enrollment by 2026, an increase year over year.
Experts say there is still plenty of time for enrollment to decline. There are 15 days left for consumers to purchase ACA plans in most states. And anecdotal evidence suggests that the affordability problem may be pushing people to opt for less comprehensive coverage, with sState ACA exchanges and health insurance brokers report increased consumer interest in cheaper but less robust products. bronze plans, along with basic coverage offered outside the exchanges, such as short-term health insurance.
Still, supporters of a clean subsidy extension argue that it is not too late for Congress to act. An extension could be made after registration closes and be retroactive to the beginning of the year, or it could be combined with a new special enrollment period.
An extension would come with its own set of difficulties, as Washington and state governments would have to implement the change and communicate it to consumers, many of whom may have already abandoned the ACA exchanges.
Still, it’s a result the healthcare industry is crying out for. Health insurers are bracing for a mass exodus of ACA members next year, though payers have pushed for steep premium increases to try to prevent membership changes from hurting their bottom lines.
Hospitals and doctors are perhaps most at risk: By one estimate, U.S. providers will lose more than $32 billion in revenue this year without expanded financial assistance.
