MONTGOMERY, Ala. — The open enrollment period for the Affordable Care Act (ACA) Marketplace begins this Friday, giving Alabamians a chance to renew or obtain health coverage for next year.
Health insurance plans through the Marketplace will continue to be subsidized through 2025. But without congressional action, Alabamians could see their premiums increase significantly, with over 300,000 Alabamians at risk of losing the subsidies at the end of 2025.
If Congress doesn’t extend 2022 IRA subsidies, up to 371,000 Alabamians could see ACA premiums rise by 93%, or $612 annually. These subsidies currently help 96% of Alabama’s ACA enrollees afford coverage, according to KFF, a health policy research organization.
“This is really one of the best deals you can get when it comes to private health insurance,” said Cynthia Cox, vice president of KFF and director of the program on ACA. “This is much more generous than what people get through work, for example, and so that’s these enhanced subsidies have led to a significant growth in the number of people who are buying ACA Marketplace coverage.”
Over 386,000 Alabamians chose a 2024 health insurance plan through the federally-run marketplace, according to a final report from the Centers for Medicare and Medicaid Services. That was an increase of about 128,000 people from the previous year — a near 50% jump — when around 258,000 Alabamians selected a plan through the federally-run marketplace.
The enhanced subsidies decrease annual health insurance payments by an annual average of $705. For example, enrollees just above poverty pay about 2% of their income for a benchmark silver plan without enhanced subsidies. With enhanced subsidies, most near-poverty enrollees can get benchmark silver plans for free.
Those who earn more than 400% of the federal poverty level, $103,280 for a family of three, have their health plan costs capped at 8.5% of income. Without the enhanced subsidies, they would have to pay full price.
Policy experts have said the enhanced subsidies have been essential for securing health coverage in non-expansion states. If these subsidies end, more Alabamians might skip coverage, increasing the uninsured rate.
Debbie Smith, campaign director for Arise’s Cover Alabama, which advocates for Medicaid expansion, said in a statement Wednesday that Alabama Arise supports “more robust tax credits to make Marketplace coverage more affordable for more people.”
“Everyone in Alabama and across our country should be able to get the health care they need when they need it,” Smith said. “And we strongly urge Gov. Kay Ivey and our lawmakers to expand Medicaid to strengthen our state’s workforce and ensure every Alabamian can access the health care they need to survive and thrive.”
Cox said that the subsidies have made private plans more accessible, especially in non-Medicaid expansion states like Alabama, by capping enrollees’ spending as a percentage of their income. The subsidies have also driven ACA enrollment numbers up, doubling since 2020, with the strongest growth in Southern states, according to Cox.
Alabama, one of only 10 states that have not expanded Medicaid, has seen significant participation in ACA plans due to the subsidies. Just over 160,000 Alabamians were enrolled in an ACA plan in 2020. That number increased about 141% over the last four years, to 386,000.
But the future of these subsidies depends heavily on the outcome of upcoming elections. Any changes to the ACA would require approval from the U.S. Congress and the president. States with competitive races that could determine which party controls the House, like Alabama’s 2nd Congressional District — the sole competitive federal race in the state this year — could influence national decisions impacting ACA subsidies and Medicaid.
“This is also maybe a reminder that the future of these enhanced subsidies, as well as the future of the Affordable Care Act, may depend on the results of the election, not just the presidential election, but in Congress too,” Cox said.
The Inflation Reduction Act passed in Congress along party lines. Vice President Kamala Harris’ tie-breaking vote was need to pass the legislation out of the Senate.
Harris has made making the ACA tax credits permanent a part of her campaign. Democrats in Congress have also launched a campaign on the issue, according to The Washington Post. According to the Congressional Budget Office, a permanent extension of the tax credits would help millions gain health insurance each year but would cost the federal government approximately $335 billion over the next decade.
Neither Democratic nominee Shomari Figures or Republican nominee Caroleene Dobson for the newly drawn 2nd Congressional District — one of whom may have the opportunity to vote on the subsidies in the upcoming term — responded to requests for comment.
Figures has promoted Medicaid expansion in his campaign, arguing it would help keep rural hospitals open by providing health insurance to people between 18% and 100% of the poverty line or those who work but cannot afford to buy insurance in the federal Marketplace. Dobson has previously signaled she supports policies that promote private health insurance through employment.
This article originally appeared in the Alabama Reflector, an independent, nonprofit news outlet. It appears on FOX54.com under Creative Commons license CC BY-NC-ND 4.0.
