Obamacare expiration will have ‘death spiral’ effect on US healthcare – experts | US healthcare
As Affordable Care Act (ACA) health insurance subsidies expire, Americans who rely on them will likely switch to plans with lower monthly premiums and higher deductibles or decide not to buy any insurance at all, having a serious and damaging impact on the entire industry, according to health policy experts.
It is estimated to more than double the average amount ACA plan enrollees pay annually for premiums; This figure will increase from an average of $888 this year to $1,904 in 2026. KFF analysis.
This will have negative economic impacts, including for rural hospitals and people with employer-sponsored health insurance, experts say.
“With a significant portion of people dropping marketplace coverage and becoming uninsured, that affects everyone, not just them,” said Emma Wager, KFF’s senior policy analyst for the Affordable Care Act (ACA) program.
Congress during the Covid-19 pandemic in 2021 adopted legislation Expanding eligibility for ACA health insurance subsidies and increasing the amount of financial assistance available to people currently eligible for subsidies. dramatic increase How many people sign up for coverage through the healthcare marketplace.
Those premium tax credits are set to expire at the end of the year, despite pressure from Democratic lawmakers and a small minority of Republicans to extend them for three years. On Thursday, legislation to protect loans failed to clear the 60-vote hurdle needed to pass the Senate.
The Republican plan to expand health savings accounts and provide payments of up to $1,500 for people to buy the most basic health insurance plans also failed.
The expiration has not affected the number of people purchasing ACA health insurance so far. On December 5, Centers for Medicare and Medicaid Services reported that 5.7 million people signed up for ACA insurance during the open enrollment period; the same time last year.
Still, Natasha Murphy, health policy director at the Center for American Progress, a liberal think tank, said she thinks the full impact of the expiring subsidies won’t be apparent until open enrollment ends Jan. 15.
“We’ll actually see who pays the first bonus,” Murphy said. “I think this is where the rubber meets the road.”
One latest surveyKFF said that if subsidies ended, a third of the 24 million U.S. adults who buy insurance through the ACA marketplace said they would likely choose a lower-premium plan with higher deductibles and out-of-pocket expenses, while a quarter of enrollees would be “very likely” to remain uninsured.
When you significantly increase premiums, “healthy people get locked out and therefore the pool gets sicker,” said Gerard Anderson, a professor of health policy and management at Johns Hopkins University.
Anderson said it became a “death spiral.” “It’s just sicker people who stay in the program until it is no longer sustainable and the insurance company stops offering the plan,” Anderson said.
People with high deductibles or no insurance may also struggle to pay medical bills if they get sick or injured.
Hospitals will then have to treat more people who can’t afford their care, Wager said.
This will be especially difficult for small and rural hospitals “with very thin margins,” Wager said.
“If they can’t make it work financially with the increase in uncompensated care they provide, they may have to close it down. They’ll probably definitely consider raising their prices and charging everyone more,” Wager said. “This includes people with employer-sponsored insurance.”
If subsidies end, people in rural areas who decide they still want health insurance will see a much larger increase in premiums than those in urban areas. Century FoundationA progressive think tank.
But the same people who depend on rural hospitals and the ACA are also more likely to support Republicans, many of whom voted against extending tax credits. More than half of ACA enrollees live in congressional districts represented by a GOP member. According to KFF.
“Farmers and ranchers are heavily dependent on the ACA,” Wager said. “There are a lot of people represented by Republicans in Congress who have Affordable Care Act coverage who will bear the brunt of these premium increases.”
