Health care premiums set to rise as ACA subsidy deal collapses
Obamacare subsidies are set to expire after Congress failed to reach a deal, leaving millions facing higher health care costs.
- Thousands of Rhode Islanders dropped their health insurance plans after federal subsidies expired.
- Enrollment in HealthSource RI, the state’s marketplace, fell by 20% in early 2024.
- The average premium for enrollees more than doubled as federal funding ended.
Thousands of Rhode Islanders dropped health insurance coverage through Rhode Island’s public insurance marketplace instead of maintaining plans with rising premiums and lower subsidies, HealthSource RI said.
Enrollment through HealthSource, Rhode Island’s “Obamacare” exchange, plunged 20% between the end of last year and the close of the annual enrollment period a month later, as federal funding for premium tax credits expired, according to a HealthSource new release.
There were 48,060 individual and family enrollments on Dec. 31 of last year, the day the premium subsidies from the American Rescue Plan and Inflation Reduction Act ended.
On Feb. 1, there were 38,557 enrollments.
Before this drop, HealthSource has posted enrollment increases almost every year since Affordable Care Act exchanges launched in 2013.
How did we get here?
Last year, the Republican-controlled federal government declined to extend premium tax credits after a protracted budget battle with congressional Democrats, who are now negotiating to restore the health insurance subsidies.
The lapse in subsidies coincided with an increase in premiums, driven by a combination of factors, which sent the total cost of coverage climbing.
The average premium across HealthSource enrollees more than doubled (101%,) the exchange said, or $111 per person, per month.
Many enrollees opted for cheaper insurance plans despite their higher deductibles and out-of-pocket costs.
Others dropped coverage altogether.
“The increase in premiums, combined with the decrease in federal supports, makes this an incredibly challenging year for folks depending on HealthSource RI for health coverage,” HealthSource Director Lindsay Lang said in the release. “Having health coverage helps protect against one bad turn of luck becoming years of financial burden. We will work with every customer to find options that are best for their needs and budget, and continue to work with state leaders and our federal delegation to find long-term solutions.”
Could help be on the way?
Gov. Dan McKee included $9.5 million in his proposed state budget for the year starting July 1 to subsidize coverage for some of the lowest-income exchange enrollees.
The enrollment declines show that may be too little for some Rhode Islanders, and too late for others.
“It is disheartening but not surprising that, as President Trump’s policies have caused health insurance costs to skyrocket, more Rhode Islanders are struggling to pay for health coverage,” McKee said.
Since the exchange opened in 2013, Rhode Island’s uninsured rate has declined by two thirds, down to 2.2%, HealthSource said.
