Monthly premiums for the 1.3 million Georgians on Affordable Care Act health insurance marketplace plans will increase by an average of 85% when pandemic-era extra subsidies expire if Congress does not renew them, a new study has found.
Since Congress and President Biden passed the “enhanced” subsidies in the American Rescue Plan Act and the Inflation Reduction Act, enrollment has surged. Georgia’s enrollment went from 464,000 in 2020 to 1.3 million this year.
The study was done by KFF, a nonprofit health research organization. The ACA marketplace exchange is also known as Obamacare.
Increased advertising under Biden, and last year under Gov. Brian Kemp in Georgia, helped, but by far the driving factor both nationwide and in Georgia was the lower prices, the researchers say.
The subsidies expire in December 2025. Congress would probably have to renew them by the summer of 2025 in order for insurance companies to lock in the lower premium prices they will offer on sign-ups for plans that cover the year 2026.
Kirk Lyman-Barner, who sells insurance in Americus, said he’s seen people buy insurance under the enhanced subsidies before and it’s been “lifesaving.” If the subsidies are not renewed, some people will drop coverage again, he said.
“When groceries and McDonald’s and everything else has gone up, they’re going to have to make choices,” Lyman-Barner said. “And if it is too much of an increase, they just go without, they give up on it.”
The enhanced subsidies that were added during the pandemic helped in two ways. They expanded subsidy help to upper-middle-income groups that previously were not eligible and had to pay full market price. In addition, for lower-income groups who were already eligible, the enhanced subsidies increased the subsidy amounts to make their plans nearly free.
Those free plans for the eligible low-income policyholders have been especially successful, with households just above the federal poverty level forming the majority of Georgia’s enrollees, 700,000 of them.
“The availability of these enhanced subsidies has contributed to a vast majority, if not all, of the enrollment growth in the ACA Marketplace,” said Jared Ortaliza, a research associate for KFF’s Program on the ACA. He added that “ … lower-income people have driven the vast majority of the growth.”
Even though low-income Georgians above the federal poverty level always had access to subsidized ACA insurance, even a $10 monthly premium could be a deal-breaker for them, KFF researchers said. That was especially true if the coverage was weak, starting with a deductible in the thousands of dollars.
Now that income group may have free premiums, as well as annual deductibles of perhaps $100 to $200.
Georgia, Florida and Texas, which did not expand Medicaid, saw the highest surges in enrollment.
The enhanced subsidies also increased the pool of eligible people. Before the pandemic, upper-middle-income families that made over 400% of the federal poverty level were not eligible for subsidies on the ACA marketplace. But with the enhanced subsidies, no one should spend more than 8.5% of their income on insurance premiums.
For example: Without the enhanced subsidies, a Georgia family of four making $130,000 a year and paying $921 a month for coverage would see their subsidy disappear, and their monthly premium increase to $1,647, according to KFF.
Extending the subsidies nationwide for another 10 years would cost the federal government a total of about $335 billion, according to projections by the Congressional Budget Office.
Whether the enhanced subsidies are extended will depend in part on the elections this year for the White House and Congress. Democrats all voted for the Inflation Reduction Act, which contained the enhanced subsidies. Republicans, expressing concern about cost and overreach, almost all voted against the bill, and former President Donald Trump has tried to repeal the ACA marketplace altogether.
