ACA tax credit expiration looms

Leslie Silverman's medication costs about $8,000 a month -- and that's considered the cheaper option. It's more than four times what she pays for her mortgage.

Silverman lives with multiple sclerosis, a type of autoimmune disease that impacts the central nervous system. First diagnosed in 2008, the West Hartford resident relied on the state's Affordable Care Act insurance marketplace to enroll in insurance that would cover treatment and medications. At the time, she was also going through a divorce while raising three children. She said that access helped turn a once-debilitating disease into little more than an afterthought over the years.

"I was so sick when I was diagnosed, and I had the right medication, and I had a good doctor, and they got me stabilized and on the right path...and I can be here working independently because I got the right care, and if I had not had that insurance," she said.

To stay healthy, Silverman relies on her medication, but accessing it is set to become far more expensive as the enhanced premium tax credits -- which helped lower her monthly costs -- are scheduled to expire at the end of the year. As a result, Silverman said her monthly premiums are expected to jump by about 300%.

Starting Jan. 1, hundreds of thousands of residents in Connecticut and millions nationwide, like Silverman, will see a spike in their health care premiums with the expiration of COVID-era enhanced tax credits through the Affordable Care Act, unless they are extended with federal action.

An analysis from KFF found that the annual out-of-pocket premiums are estimated to increase by 114% -- an average of $1,016 -- next year if the tax credits are allowed to expire.

These tax credits have been the center of monthslong clashes between lawmakers, resulting in the longest federal government shutdown in U.S. history. Here's the latest on the situation.

What is happening?

Access Health CT has offered residents some form of financial assistance to help pay for health insurance since its launch in 2013, following the implementation of the Affordable Care Act. The aid was initially only offered to people living at or below 400% of the federal poverty level.

Those income limits were removed during the COVID-19 pandemic as part of the American Rescue Plan Act, while the 2022 Inflation Reduction Act extended the enhanced aid through 2025. The changes also eliminated premiums for some lower-income enrollees and capped costs for higher earners at 8.5% of their income.

Last year, in Connecticut, these tax credits provided an estimated $350 million to $400 million in premium subsidies to more than 140,000 state residents, nearly 90% of all enrolled.

The aid eligibility is expected to revert to the pre-pandemic income cap, once again creating a severe cliff for those with higher incomes, if not extended. Yet, the ensuing discussions and political chess game around the tax credits has featured lots of talk, mixed signals, and no clear commitment.

Enhanced tax credits sat at the center of the record 43-day government shutdown led by Democrats to extend the credits, which ended only after four Senate Democrats agreed to help reopen the government in exchange for a Republican promise to bring a vote on the tax credits.

In recent weeks, the Senate ultimately rejected both a Republican health care proposal on employer-sponsored health insurance plans and a Democratic bill to extend the tax credits for three years in mid-December, with just days left in the session.

Leaders within the Republican Party are also debating the next step internally. Four Republicans recently broke away from the majority to back a Democratic-led bill that'd force a House vote.

One thing is unmistakable amid all the uncertainty: if no action is taken, premiums will go up next year.

What is Connecticut doing?

Access Health CT estimated that roughly 52,000 Connecticut residents -- about a third of the 151,000 enrolled -- could lose coverage by 2034 if enhanced financial aid ends and Medicaid is cut. Without access to health insurance, the resulting costs extend beyond the individual, increasing uncompensated care and contributing to higher insurance rates across the broader community.

In response, Gov. Ned Lamont authorized $70 million in state funds to extend the subsidies by a year for more than 100,000 low and middle-income families. The funding is drawn from a broader $500 million reserve set aside to address contingencies stemming from actions by the Trump administration and the Republican-controlled Congress.

How this state support will impact residents will look different person to person. At the press conference announcing the move, Lamont said single adults earning up to $56,000, for example, will see no changes in their costs; meanwhile, those with higher incomes will pay slightly more than they do now, but will still receive state support.

Lamont said, for example, that a couple in Middlesex County earning $60,000 and enrolled in Access Health CT's Anthem Silver plan would see their monthly premium fall by $210. He added that a family of four in Fairfield County with an income of $85,000 would save $176 a month compared with their current coverage.

Access Health CT is actively working out the mechanics of Lamont's initiative with the state Office of Policy and Management, according to a statement from CEO James Michel. Once full details are available, marketplace staff will be reaching out to consumers.

How is enrollment looking so far?

The ongoing open enrollment period to sign up for health insurance with Access Health runs until Jan. 15, 2026.

So far, more than 145,265 Connecticut residents have enrolled in insurance through the marketplace as of Dec. 15, according to data from Access Health. In comparison, enrollment was 141,299 at the same time last year.

Michel previously told CT Insider that many enrollees renewing their plans are switching to lower monthly premiums but higher out-of-pocket costs on the exchange, rather than dropping out of coverage. Even so, the exchange is still projecting an 8.2% drop in enrollment overall, though that could change if federal action is taken.

Originally enrolled in a Silver Plan, Silverman said she plans to join a lower-cost, lower-coverage plan that would cover the required medications. Expenses are still everywhere, she added, so even if the subsidies were extended, it's a "band-aid" on the bigger issue of rising health care costs.

New Britain resident Alison Planco still isn't sure what the increasing premiums will do to her monthly costs.

A professional nanny, Planco said she's relied on the exchange to access health care coverage for her and her son. She lives with severe chronic back pain, which, when it flares up, impacts her physical and emotional health and her livelihood.

Without the tax credits, Planco said she wouldn't be able to afford even a bronze-level plan, which is the lowest option currently offered through Access Health. She is talking with her longtime financial broker about potential next steps, but the uncertainty remains, asking herself, "do I need to leave a profession that I believe I was born for?" for coverage.

At 50, Planco said she felt settled and confident, with a clear sense of where her life was headed, until now. She also worries about how losing access to care could affect her ability to stay healthy -- and what that might mean for her son and her career.

"I don't know if I can continue working a job that doesn't provide insurance like other people in my same situation, that then impacts the families that I would that I currently work for and that I could potentially work for. Now, their struggle to find good childcare is impacted," she said. "Whatever the situation is, I think that it's easy for people to feel apathetic if it doesn't hurt them personally, but just like my own experience has this ripple effect, it will ultimately impact all of us."

What are the alternatives?

Financial brokers are working to help their clients find more affordable alternatives to access coverage without compromising their finances or health.

Founder of Waterbury-based B&A Benefit Solutions, Inesta Belardo has been helping people sign up through Access Health since it launched in 2013, and has seen firsthand how the law and the marketplace have made it easier for lower-income residents to get health coverage.

She said it also allowed for more self-employed and small business owners to access insurance.

As a result, the impending expiration of the subsidies has sent waves of worry and fear through the communities Belardo works with. She said some clients have told her they're already cutting back on medications, concerned they won't be able to afford them in the future. One of her clients - a couple - is seeing their premiums go from $456 to $1,300 a month.

Some people are losing their subsidies or changing coverage, and at the same time, they may be at risk of losing other state benefits, such as SNAP and Medicaid, which are also facing cuts.

Beyond the impact on individuals, small businesses and medical providers are also likely to feel the effects. Belardo said she can imagine some doctors' offices stopping acceptance of certain insurance plans or being left with unpaid bills when patients can't afford their copays.

Brokers who help people enroll through the marketplace have historically dealt with their own set of challenges, Belardo said, especially inconsistent commissions and payment delays, which have led to waves of people leaving and rejoining the workforce.

"This is something that is going to topple our economy, no matter which way you look at it, if we lose the enhanced subsidies that are in place now. And frankly, the bandage that may be being applied is simply nothing but a bandage," she said. "As we continue on, we also still continue to see that some of the carriers have have decided to reduce, if at all, pay the brokers for their services."

Belardo's advice to clients has ranged from taking another look at how much coverage they really need to focusing on improving their overall health to cut down on doctor visits.

Some of the options offered have included removing preferred provider organizations from coverage or turning to "old-fashioned health maintenance organizations," Belardo said. Those who can afford it, she said, may turn to concierge care -- paying monthly or annual fees for better access to a doctor instead of relying on traditional health insurance.

Reporting from the Associated Press was used in this story.