On November 1, Michelle Higgs intends to visit the Affordable Care Act (ACA) health insurance marketplace to evaluate the potential cost increases for her family’s health insurance if Congress does not extend enhanced subsidies. Currently, her family’s plan—which includes coverage for her husband and two young children—could see a rise of over $2,000 per month without these subsidies. This projected increase does not take into account the annual premium hike, which is anticipated to be the highest since 2018.
“The reality is…we’re not going to be able to afford that,” Higgs expressed, indicating that her family might have to switch to a catastrophic plan, which only covers emergency situations, as a means to lower their premiums. With more than 300,000 Indiana residents similarly enrolled in the marketplace awaiting new figures, the uncertainty surrounding premium costs looms large.
According to health policy research group KFF, Indiana residents qualifying for enhanced subsidies may face premium payments up to 82% higher than last year’s rates if there is no extension. This could lead to a situation where roughly one-fifth of current marketplace enrollees in the state become uninsured by 2034, with Indiana ranking among the 13 states where the largest percentage of enrollees would lose their health coverage.
Higgs, who has founded the Indiana Rural Summit, balances her work as an organizer and aspirations of running for the state legislature alongside her husband’s consultancy. Their family illustrates a broader demographic of Americans who buy health insurance independently rather than through an employer, relying on subsidies to make coverage more affordable.
The looming deadline raises the specter of significantly increased healthcare costs for all Americans, as insurance companies have begun preparing for a mass unenrollment by adjusting their premium rates upwards to maintain profit levels. This issue is further complicated by the ongoing government shutdown, which is nearing a historic length. The extension of the subsidies that expanded under President Biden remains a point of contention among Democrats, who argue for its inclusion in spending negotiations, against the Republican stance that sees it as unrelated to budget discussions.
The rise in premiums not only jeopardizes low-income families like the Higgs but could also exacerbate challenges in the social safety net. The U.S. Department of Agriculture recently announced a lack of funds for November’s food stamps due to the shutdown, leading many food pantries to face unprecedented demand amidst a growing need this year.
Tracey Hutchings-Goetz, an organizer at the small southern Indiana nonprofit Hoosier Action, noted that even her organization has felt the pressure of escalating healthcare costs, receiving a quote of a 50% increase from their insurance broker. “Nobody feels safe right now from escalating health care costs,” she said, highlighting a sentiment shared by many.
The complexities surrounding healthcare costs have left policymakers struggling to find straightforward solutions. Kosali Simon, a professor at Indiana University and health economist, pointed out that the dialogue often centers around the question of payment, rather than addressing why healthcare is so expensive. “This is the $4 trillion question,” Simon remarked, emphasizing the need for systemic answers.
Former President Donald Trump has suggested a possible overhaul of healthcare policy and has expressed openness to extending the subsidies, although this viewpoint is met with resistance within his party. Critics argue that such extensions could foster fraudulent claims and perpetuate systemic issues, advocating for measures that encourage lower premiums straight from insurance providers instead.
Advocates warn that if subsidies are not extended, those unable to afford increased premiums will likely find themselves uninsured or forced to lower their earnings to qualify for Medicaid. The risk of facing crushing medical debt looms large, particularly for younger, ostensibly healthier individuals.
Additionally, the effects of expired subsidies are set to ripple through the healthcare system, impacting rural hospitals that can only operate with thin profit margins. Justin Harris, CEO of Daviess Community Hospital in southern Indiana, emphasized the dire situation: “If you don’t have insurance, we don’t get paid.” With rural facilities often relying heavily on Medicaid and Medicare, ongoing cuts to these programs, coupled with increased demand for care without corresponding payment, threaten their viability.
Harris highlighted the disparity between reimbursement rates from government programs versus private insurance, pointing out that while larger hospitals can absorb losses due to volume, rural facilities often struggle to maintain operations. “We’re not asking to gouge the government; we are really just asking to get closer to break-even,” he said.
As January approaches, marketplace enrollees are expected to face higher premiums regardless of whether the subsidies are renewed, with Indiana anticipating an average rate hike of 26% for individual marketplace plans. Employers with insured employees may also pass along higher rates, compounding the financial burdens faced by working Americans.
The anticipated fallout is not merely about rising costs; it reflects deeper issues within a profit-driven healthcare system and legislative stagnation. As Hutchings-Goetz pointed out, the financial challenges represent broader systemic failures, leaving many to ponder what society is willing to forgo to ensure affordable healthcare is accessible to all. “What’s the tradeoff?” Simon asked, encapsulating the critical societal question that remains unanswered amid the current crisis.
