Could uncertainty over ACA tax credits spur a special session for Virginia lawmakers?

Special tax credits that help people purchase health insurance are set to expire later this year if Congress doesn't renew them. Virginia lawmakers are planning ahead should the credits lapse and trying to understand the ripple effects the loss would spur in the state.

Federal lawmakers didn't take action to renew them when passing a reconciliation bill this summer (which will adjust other healthcare affordability measures in the future), leaving state lawmakers wondering how and if they will be able to make up for lost federal assistance.

Senate Majority Leader Scott Surovell, D-Fairfax, sent a letter to Virginia's insurance commissioner this week asking for an "urgent analysis" of how Virginians would be affected if the credits expire.

About 400,000 Virginians purchase health insurance through the state's exchange, and some of those people qualify for and use the enhanced premium tax credits that Congress created in 2021 and extended in 2022. The credits are meant to apply to people that earn between 100% and 400% of the federal poverty level.

Surovell is trying to determine not only how many people might face higher prices and decide to forego health care coverage for themselves if the credits disappear, but also if some insurers might feel inclined to leave the ACA Marketplace.

This summer, Aetna announced plans to withdraw from the Affordable Care Act marketplace at the end of the year. The ACA marketplace was established by a 15-year-old federal law that allows people without employer-provided health care to purchase their own. Then, associated tax credits help further offset those costs, which is particularly helpful for low or middle-income earners. The Mercury asked if the uncertainty of enhanced premium tax credits' fate were a factor, but Aetna representatives neither confirmed nor denied.

Just as Aetna has let customers know they will need to look elsewhere for coverage in 2026 onward, health care associations caution that people will start considering their options by the fall.

Multiple associations — including those representing insurance companies — recently sent a joint letter to members of Congress to try to persuade skeptics or opponents.

"By October, millions of Americans will be 'window shopping' and see the full extent of these soaring premiums for 2026," the joint letter said. "And already, many of the 24 million people enrolled in the individual market are receiving letters informing them that to maintain their coverage they will need to find hundreds or thousands of dollars in already stretched family budgets."

While not all of the tax credits will go away in December, it's the enhanced premium tax credits that reach further to those who need it that are at risk. If Congress lets them expire, credits would revert to pre-2021 levels and fewer people would qualify for them.

Virginia Health Benefit Exchange director Keven Patchett told lawmakers last week that an estimated 100,000 Virginians could fall off their insurance due to the cost. He also estimated that out-of-pocket premiums could rise 30% to 50% in January of next year.

Representatives for the Exchange further confirmed the 100,000 figure Friday afternoon. The Bureau of Insurance also plans to provide presentations on proposed average changes to rates "as submitted by carriers" for 2026 that will be posted to the State Corporation Commission's website on Aug. 7.

But loss of health care has consequences beyond the people who lose it, Julian Walker with the Virginia Hospital and Healthcare Association has also warned.

In a recent conversation with the Mercury, he explained that people without health insurance are more likely to put off preventative care or seek treatment for conditions until emergencies arise. Emergencies are when costs of treatment also tend to be higher and hospitals must treat patients regardless of their payment or insurance status, per federal law.

So, they end up absorbing the costs that they then sometimes seek to offset. As hospitals periodically negotiate with private insurers, rates could go up for employers and employees with private health insurance.

With potential changes or tough choices about health insurance in the near future, Surovell told the Mercury he believes state lawmakers may "need to act on this in the next two months or so."

Whether that means calling lawmakers back to the Capitol for a special session remains unclear, just like the future of the credits.

With Congress breaking for the summer, federal lawmakers could decide to take action on the credits later this year. The lack of addressing the credits in congress' recent reconciliation bill could hint at their unlikely renewal, but some Republicans are split on preserving them.

Virginia Speaker Don Scott, D-Portsmouth, was not available for an interview Friday and has yet to make a statement on the possibility of a special session to address the matter.

There's also $900 million Virginia has reserved to use as needed. When finalizing state budget amendments earlier this year, Gov. Glenn Youngkin chose to hold onto part of the state's surplus as "cushion" for federal actions by Congress and President Donald Trump.

A spokesperson for Youngkin did not follow through by the time of this publication when asked how much of the surplus he suspects the legislature could tap into for health care and if the governor would welcome it. By January next year, however, Virginia will have a new governor who could steer conversations with legislative leaders on how to spend or not spend the surplus.

In the meantime, Virginia House Health and Human Services committee chair Del. Mark Sickles, D-Fairfax, is watching federal matters closely to see if lawmakers might need to assemble before the year's end or wait to address things in their 2026 session.

The idea of a special session is a "maybe," he shared in a text message. No decision has been made yet by Democrats, who control both Virginia's House and Senate chambers.

"I need to find out how much it would cost to replicate recent results or produce something less useful but still worthwhile, " Sickles said.