Open enrollment begins for Obamacare with huge cost increases
by Allen Cone · UPINov. 1 (UPI) -- Open enrollment began Saturday for healthcare insurance through Affordable Care Act marketplaces, and policyholders are bracing for big premium increases amid subsidy losses.
This year, a record 24 million Americans got their coverage through the ACA, commonly referred to as Obamacare, which debuted in 2010. Around 17 million people signed up for coverage in 30 states with roughly 7 million utilizing plans run by their states.
The website opened Tuesday on healthcare.gov.
In most states, open enrollment runs through Jan. 15, though Dec. 15 is the deadline for coverage to start on Jan. 1.
The beginning and end dates to enroll through the marketplaces vary for states running their coverage.
Users are facing a double whammy of rising costs because of rising hospital care and prescription costs, and the expiration of enhanced subsidies through tax credits from the federal government.
The government has been shut down since Oct. 1 as Democrats want the subsidies to be extended to at least next year after being dropped in the spending bill signed into law in July.
The enhanced subsidies were initially introduced under the American Rescue Plan Act of 2021 during the COVID-19 pandemic, and were extended through 2025 by the Inflation Reduction Act of 2022.
The Congressional Budget Office projects 3.8 million people will drop their coverage and become uninsured annually over the next eight years if the subsidies are not extended.
"It's a high-risk situation for people," Stacie Dusetzina, a health policy professor at Vanderbilt University in Nashville, Tenn., told NBC News.
"If it comes down to paying for food, power and heat versus health insurance that you don't know if you'll need or not, it's hard to continue to pay for that given how much of your budget it takes today," Dusetzina said.
Rates will rise 26% on average next year, according to a KFF analysis released Thursday -- not including the end of the subsidies.
In all, costs will more than double, according to a separate KFF analysis of data from the Centers for Medicare and Medicaid Services.
"The premium increases are the biggest we've seen since the ACA exchanges were set up," Gideon Lukens, a senior fellow and director of research and data analysis on the health policy team at the Center on Budget and Policy Priorities, a nonpartisan research group, told NBC News.
"At the same time, they're a lot smaller than the out-of-pocket increases due to the expiring enhancements," Lukens said.
Premiums for the benchmark plans are expected to soar 30% on average for the 30 states that use the federal exchange, while premiums for benchmark plans in states that run their own marketplaces, premiums will rise by an average of 17%.
Although the initial tax credits to reduce the cost of premiums on ACA insurance plans had income caps, there have been no caps since 2021 during the pandemic, when Congress worked to make it more affordable for people to buy insurance.
The initial caps restricted the credits to people earning up to 400% of the federal poverty level -- about $78,800 for an individual and $163,200 for a family of four.
If consumers earned $1 over that limit, they lost eligibility for all financial assistance, but could also get tax credits if their premiums exceeded roughly 8.5% of their income.
"The reason why we call them enhancements is because they expanded eligibility, and they also increased the credit for everybody," Lukens said. "It really led to an incredible amount of enrollment."
In 2018, during President Donald Trump's first term, premiums on the federal exchange rose by 37% when he eliminated federal support for the subsidies.
States that run their own health insurance marketplaces have announced that in some cases, premiums will more than double.
In New Jersey, premiums will rise to more than $2,780 annually -- an increase of more than 174%, on average -- CNN reported.
This includes the insurers' rate hike of 16.6%, according to the state's Department of Banking and Insurance.
On top of the increase, about 60,000 enrollees in Get Covered New Jersey will completely lose federal assistance in paying their premiums in 2026.
"Consumers will soon be shopping and comparing health plans, and without these enhanced tax credits, they will be confronted by startlingly higher prices for coverage," Justin Zimmerman, commissioner of the state's Department of Banking and Insurance, said in a statement.
"We are significantly concerned that many households will be forced to choose plans with lesser coverage or choose no coverage at all as a result," Zimmerman said.
Colorado's program is seeing similar increases: In the Denver area, a family of four living with an annual income of about $128,000 would no longer qualify for premium assistance.
With a standard silver plan, a family's annual premium bill will increase by $14,000, although if the subsidies are extended, the average increase for enrollees would be 16%.
The highest increases across the country are in Republican-run states -- 278% in Wyoming and 273% in West Virginia.
"We'll revert to a system where there's a benefit cliff, where a 60-year-old couple will no longer get any assistance in buying their premiums and will have to pay the full amount out of pocket," Art Caplan, head of the medical ethics division at New York University's Grossman School of Medicine, told NBC News.
According to Grossman, a 60-year-old couple making $85,000 a year would expect pay roughly $2,000 more in premiums, taking the monthly payments from about $600 a month to $2,600 a month.
In another change, people earning up to about 150% of the federal poverty level, or roughly $23,500 for an individual, no longer can sign up for ACA coverage at any time, not just during open enrollment.
The change took effect Aug. 25 after insurers said some people were waiting until they got sick to sign up for coverage, or later switching to a more generous plan that offered better coverage for their illness, said Cynthia Cox, director of the program on the ACA at KFF.
Caplan said that in 2025, nine out of 10 people buying insurance through an ACA exchange received the subsidies, and many recipients of them work at or own small businesses.
"These are the mom and pop shops," Caplan said.