An item in the Democratic spending bill that would extend subsidies to lower-income people in the Affordable Care Act marketplace could keep thousands of Mainers insured and stabilize costs for others if it passes.
The Inflation Reduction Act, passed by the Senate this weekend, is headed to a vote in the House on Friday. While significant future drug-pricing reforms have gotten more attention, the measure’s immediate effect on the health care market is in continuing large subsidies for people at or above the poverty line put into place in 2021 by the American Rescue Plan Act.
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That had been a major question mark for health care advocates who feared many would not be able to afford insurance without them. The state does not expect the bill will affect carrier rates, but insurance experts say the measure will help keep consumer costs low by reducing premiums and keeping enrollment up.
“We stand ready to help consumers understand their options as open enrollment approaches this fall,” said Jackie Farwell, a spokesperson for the Department of Health and Human Services.
Marketplace enrollment in Maine reached a three-year high at just over 66,000 in 2022 after COVID-19 pandemic changes made the program bigger after years of decline. Without the subsidies, federal estimates show 14,000 Mainers, or 21 percent of enrollees, would probably drop their insurance by the end of this year because it would be unaffordable.
The vast majority of Maine enrollees receive assistance in paying for coverage, with only 17 percent either not completing financial forms or qualifying for subsidies, according to a March report. A third of plan selections were made by Mainers aged 55 to 64, showing that residents just below Medicare age likely benefited from the lower costs.
The subsidies are also believed to have contributed to more people signing up for more expansive plans that provide more coverage, with the amount of people buying silver plans increasing by 6 percentage points between 2021 and 2022 enrollments.
The state expects little effect on premiums, with Maine insurance bureau spokesperson Judith Watters saying insurance carrier rates filed for the upcoming enrollment period did not show the planned expiration of the subsidies as a major factor in costs.
Several states were projecting increased marketplace rates due to rising prices paid by health care providers and increasing use of services as of mid-July, according to the Kaiser Family Foundation, something the group said could have been compounded if the subsidies expired.
Maintaining the premiums means people who qualify for them will still be paying significantly lower prices overall, especially if they shop around for coverage, said Kate Ende, a policy director for Consumers for Affordable Health Care, a group that recommends people do that every year. That will have a marked effect on people of various income levels, she said.
For instance, the liberal Center on Budget and Policy Priorities estimated a 60-year-old couple making $75,000 annually in Maine could see a $15,388 increase in premium costs without the subsidies.
“For individuals, whether the base premiums go up or down, they’re going to be largely insulated because the subsidies are based on a percentage of their income,” Ende said.