If you get your health insurance through the government Health Insurance Marketplace, you may want to brace for higher premiums next year.
Unless Congress takes action, enhanced premium subsidies — technically, tax credits — that have been in place for 2021 and 2022 will disappear after this year. The change would affect 13 million of the 14.5 million people who get their health insurance through the federal exchange or their state's marketplace.
"The default is that the expanded subsidies will expire at the end of this year," said Cynthia Cox, a vice president at the Kaiser Family Foundation and director of its Affordable Care Act program. "On average, premiums would go up more than 50%, but for some it will be more."
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Most enrollees — which includes the self-employed and workers with no job-based health insurance — receive subsidies, which reduce what they pay in premiums. Some people also may qualify for help with cost-sharing such as deductibles and copays on certain plans, depending on their income.
Before the temporary changes to the calculation for subsidy eligibility, the aid was generally only available to households with income from 100% to 400% of the poverty level.
The American Rescue Plan Act, which was signed into law in March 2021, removed — for two years — that income cap, and the amount that anyone pays for premiums during the reprieve is limited to 8.5% of their income as calculated by the exchange.
Assuming Congress does not extend the expanded tax credits, only people with household income from 100% to 400% of the federal poverty level will once again qualify for subsidies.
Exactly how much of a premium increase a person would see depends on income, age, the premium cost where they live and how the premiums charged by insurers change for next year, according to Kaiser.
Here's a hypothetical example, based on a report from the Congressional Budget Office: Say a 64-year-old with $58,000 in income — about 430% of the 2022 poverty level of $13,590 — has insurance through the exchange. The 8.5% limit currently in place means they would pay no more than $4,950 for premiums this year. However, if faced with a 400% cap on eligibility in 2023, that same person would pay $12,900 for premiums because they'd no longer qualify for subsidies.
A proposal to extend the extra subsidies through 2025 was included in the Democrats' Build Back Better bill, which cleared the House last year but fell apart in the Senate.
It's uncertain whether the provision will be revived in some form via other legislation that Democrats may try to get through the Senate before a new Congress starts in January — the makeup of which could look very different due to the midterm elections Nov. 8.