After enhanced Obamacare health insurance subsidies expire, the effects are starting to show

WASHINGTON — The federal government shut down for 43 days last year when Democrats demanded Republicans extend the enhanced premium credits that helped pay for health insurance on the Affordable Care Act marketplace that expired Dec. 31.

But negotiations stalled, leaving 24.2 million Americans — small businesses, gig workers, independent contractors, early retirees and others — paying twice as much for their health insurance this year compared to last.

"These enhanced premium tax credits keep their coverage affordable," said Jan Moller, executive director of Invest in Louisiana, progressive Baton Rouge-based analysts on state finances.

The Congressional Budget Office estimated 2 million people in 2026 could no longer afford health insurance and would drop their policies, with increasing numbers thereafter. The Urban Institute calculated 5 million would lose insurance because the financial cushion was removed.

The first snapshot of actual sign-ups indicates those estimates could be reached or exceeded by the end of the year.

About 1.2 million policyholders have already dropped their ACA marketplace policies compared to enrollment numbers on the same date last year, according to the Centers for Medicare & Medicaid Services. CMS, which oversees Obamacare, took its initial census on Jan. 15, the day open enrollment ended.

Just how many in Louisiana dropped coverage is unknown. But CMS reports 296,648 enrollees in the state — up slightly from last year.

KFF, nonpartisan health care analysts based in Washington, cautions that the initial enrollment report comes with a lot of asterisks.

For instance, Louisiana saw a 1.2% increase in enrollment. But last year's report showed a 27% increase.

About 40% of policyholders automatically reenroll for the same policy, possibly without checking the price, says KFF.

New policyholders must pay a month of premiums upon signing up. Renewals are allowed three months to pay premiums. Thus, the numbers will be adjusted later this year to remove those who don't make the payments. Those numbers won't be available until July.

Exchanges run by the states, rather than relying on the federal government's website, report that ACA Marketplace customers are buying policies that cost less but have much higher deductibles and provide much less coverage.

For instance, California reported about a third of its renewing members switched to the less expensive bronze plan, which requires consumers to pay out $7,500 before the insurance starts paying most medical costs.

Enacted in 2010, the Affordable Care Act expanded state and federally paid Medicaid coverage for households making less than 138% of the federal poverty level, or $44,367 for a family of four.

It also recognized that many employers don't help their employees pay for health insurance, which is how about 60% of the nation is insured.

The ACA Marketplace was created to fill in the gap by offering individuals bronze, silver, gold and platinum policies, each providing differing levels of coverage through private health insurers. Obamacare also provided a range of subsidies, mainly based on annual income and household size, for those who couldn't fully afford the costs.

Any household of four making more than $128,600 annually — 400% of the federal poverty level — paid the premiums. But those falling in between the 138% of poverty and 400% could receive financial aid.

In response to the COVID-19 pandemic, the income-level eligibility was lifted from 2021 through 2025, allowing some premium tax credits for families making more 400% of the federal poverty level — the amounts depended on several factors. The end of the premium tax credits on Jan. 1 dramatically increased what those people pay.

As many consumers fret over increased costs, the Democrats hope to focus on the Republican majorities' refusal to renew the subsidies as a key point in this fall's congressional midterm campaigns.

While "affordability" resonates in Louisiana, five of the six House races aren't competitive, so touchy issues likely won't be addressed, said Pearson Cross, a political science professor at the University of Louisiana Monroe.

The Fifth Congressional District, which includes parts of the Baton Rouge area and the Florida parishes, has seven Republican and five Democratic candidates. "It is possible that candidates could stake out different positions on the tax credits, and it could be quite an issue," Cross said.

In the Senate race, incumbent Sen. Bill Cassidy, the Baton Rouge Republican who chairs the Senate Health committee, faces two strong GOP challengers.

"It could really be a contributing factor in the race," Cross said. "I think Cassidy would have much more credibility on this issue than any of the other candidates. This might be something that he would capitalize on."