Congressional delegation warned against lapse in medical insurance subsidy

The issue that has Congress at a standstill could soon become a major issue for many and maybe most Oklahomans, a state contingent from the health care sector told congressional staffers last week.

"Quite honestly, it's one of the only times that I've seen everyone in the industry in agreement on something," Julie McKone, executive director of Oklahoma Families for Affordable Healthcare, said Monday.

That unity prompted McKone and others involved in health care to urge Oklahoma's Republican congressional delegation to extend or make permanent the enhanced tax credits for the Affordable Care Act health insurance marketplace plans enacted during the previous Democrat administration.

The matter has locked up the current Republican-led Congress, with Senate Democrats refusing to allow a GOP continuing resolution to advance without action on the expiring tax credits.

Without the CR, the federal government will begin shutting down on Oct. 1.

The ACA credits, which go mainly to working Americans without employer-based insurance, expire at the end of the year, and the anticipation of their ending is already being baked into premiums for next year.

"Time is of the essence," said Haley Faulkenberry of the Oklahoma Association of Health Plans. "The health plans are submitting their premium rates right now, and those are going to become public in October, and then open enrollment starts in November."

About 100,000 Oklahomans believed to be claiming the tax credits now will see their net out-of-pocket costs rise 75% to 100%, experts say, but just about all health insurance rates and medical providers will be affected.

That's because many people are expected to drop coverage because of the higher rates. The loss of relatively healthy individuals raises the per-person cost for the insurer of those still covered, while more uninsured unhealthy people means more uncompensated care and more cost-shifting to everyone else.

Seven insurers currently offer health plans through the ACA's individual marketplace in Oklahoma, Faulkenberry said. All told, about 300,000 Oklahomans are enrolled in ACA plans.

Of those, about one-third are thought to have qualified for tax credits through the enhanced eligibility provisions.

Originally, ACA marketplace subsidies, in the form of refundable tax credits, were limited to households with incomes within 100% to 400% of the poverty line.

In 2021, however, enhanced eligibility was extended to individuals and households whose health insurance premiums exceed 8.5% of income, regardless of how much that income is.

Those are the subsides that are due to expire in December.

Faulkenberry said enhanced eligibility appeared to have a stabilizing effect on Oklahoma's ACA marketplace by bringing in a wider range of policyholders. She said the number of Oklahomans using the marketplace has about doubled since the new rules went into effect.

"These are working Oklahomans that do not have an employer-sponsored health plan," said Faulkenberry. "These are individuals who own or work in small businesses. These are entrepreneurs. These are farmers."

"It's the middle-income families who could really feel this the most," said McCone. "It's farmers. It's self-employed. It's early retirees (not old enough for Medicare) who are going to feel this and who this will affect."

Besides McCone and Faulkenberry, the group that met with congressional staffers last week included Zach Lee, director of government and community relations for Integris Health; Sara Barry, CEO of the Oklahoma Primary Care Association; and Emily Crouch, senior vice president of government affairs for the Oklahoma State Chamber of Commerce.

The Oklahoma City and Tulsa Regional chambers and the Oklahoma State Medical Association were among organizations signing off on a letter sent to members of the state's congressional delegation.

The letter cited examples of projected increases, including a Seminole couple in their early 60s whose out-of-pocket costs would nearly quadruple to more than $25,000 a year.

But while extending the tax credits may be beneficial to household and perhaps even state budgets, it would cost the federal government an estimated $380 billion over 10 years.

Some who favor extending the credits in some form say they can be modified to save money and still serve their intended purpose.

Among suggestions are a one- or two-year extension while the program is reworked, hospital reimbursement caps, and other cost-containment measures and eligibility tweaks.

And, for some Republicans, anything related to the Affordable Care Act remains anathema.

But "we believe that extending these credits is one of the most important things that Congress can do to keep health care affordable and accessible for Oklahomans," McKone said. "I don't know that a lot of Oklahomans are educated on this. I don't know that even a lot of people on the marketplace truly understand how quickly and severely this can impact them."