Editorial: Democrats point to problem deeper than the shutdown

By The Herald Editorial Board

Avoiding the largely unproductive debate over who's to blame for the federal government shutdown, those of us who depend upon health insurance coverage ought to be paying attention to why Democrats — usually keen to keep government open, providing services and paying its bills — are holding out for more than a simple agreement to deal now and continue budget negotiations later.

Congressional Democrats are holding out for recognition of a fast-approaching health coverage cliff, most immediately regarding tax credits used to pay for premiums under the Affordable Care Act, made law in 2010 and favorably viewed by 64 percent of Americans.

Washington Democrats, including Sen. Patty Murray and Rep. Rick Larsen, called press conferences this week, joined by providers of health insurance and health care, to outline why broader negotiations are critical to the nation's health care and economy.

Since introduction of the enhanced premium tax credits in 2021, enrollment in the Affordable Care Act's marketplace has more than doubled from about 11 million to more than 24 million people, most of whom receive the tax credits; or will until their expiration at the end of the year. If the enhanced tax credits are allowed to expire, those enrolled will see less assistance or lose eligibility altogether, forcing a choice between trying to pay for higher premiums themselves or simply foregoing coverage.

The enhanced tax credits subsidize insurance premiums for those enrolled on a sliding scale. One example, provided by health policy and information organization KFF, shows an individual making $28,000 a year paying no more than 1 percent ($325) of annual income for plan premiums. If the extended tax credits expire, that person's share increases to nearly 6 percent of their income ($1,562) for the same coverage, an increase of more than $1,200.

Likewise, a household making $55,000 a year would see ACA Marketplace premium costs increase from $4,010 a year to $5,478, an increase of nearly $1,500.

On average, Americans enrolled in the ACA plans can expect an average annual increase of $1,300 if the tax credits expire. Among those enrolled, many live in rural areas, are farmers, are self-employed or run small businesses.

In Washington state, nearly 1 in 4 residents get their health insurance through the state's Washington HealthPlanFinder program, including 1.6 million adults and children covered under Apple Health, the state's Medicaid plan, and another 286,500 enrolled in ACA plans.

Estimates cited by the Washington Health Benefits Exchange expect higher costs of $1,325 a year for most state residents, and $1,900 a year for those 55 and older, in absence of the tax credits.

And the numbers above don't account for expected losses to Medicaid coverage beginning in 2027 when work requirements adopted this year in H.R. 1 — the "Big Beautiful Bill" — go into effect.

"Families are going to start getting some eye-popping announcements in the mail about their health care rates this month," said Murray during an online press conference from Washington, D.C., on Thursday. "We are talking about the highest premium increases in years, and Republicans think they can ignore this."

As for Republican efforts to convince Democrats to join in passage of a "clean" continuing resolution to reopen the government and then begin negotiations over health care concerns — including the Medicaid cuts in the "Big Beautiful Bill" and the expiring tax credits — Murray and Larsen are skeptical of the offer.

Republicans voted down three attempts to address the tax credit expiration earlier this year, Murray said, and instead adopted the Medicaid cuts in order to try to balance about $1 trillion in tax cuts over the coming decade, mostly benefiting wealthy Americans and corporations.

And just as the shutdown clock is ticking up day by day, so to is a clock ticking down on the insurance premiums of millions of Americans, including those covered by employers' plans.

Waiting until November or December, Larsen said, won't work because insurers and states are setting premium rates right now — on the assumption the tax credits will expire — and locking those rates in for customers for next year.

"That's why it's important that these tax credits get passed now so they can be folded into the premium estimates that people will be facing around the country. And that's why we're holding out," Larsen said Wednesday in a online conference from his Everett office.

Some states, such as Washington, might be able to adjust rates more quickly if tax credit legislation is adopted toward the end of the year, Larsen said, but some families and individuals may still opt out of coverage based on the price quotes they're about to receive.

And the numbers of those opting out of coverage could mount quickly.

Ingrid Ulrey, chief executive of the Washington Health Benefit Exchange, which operates the HealthPlanFinder website, said the exchange expects the premium increases — which already were rising in recent years with overall increases in health care costs — could reduce enrollment in the state by a third to a half of current figures.

And that drop in the number of state residents is concerning to hospitals, said officials speaking alongside Murray on Thursday. The expiration of the credits, said Dr. David Zonies, chief medical officer at Harborview Medical Center in Seattle, will mean a loss of access to medical care, poorer outcomes for patients' health and greater instability for the state's health care system.

"Loss of coverage will often force our patients to ration or forego essential medical care, which will ultimately lead to worse health outcomes," Zonies said. Delaying care, he said, will mean more and sicker people turning to emergency rooms for care, rather than using preventive care that's more affordable and provides better health outcomes.

Before passage of the ACA, Zonies said, about 11 percent of Harborview patients were uninsured, relying on the hospital's charity care program. Since the ACA, that portion of uninsured had dropped to about 5 percent.

"From a public health perspective, this is extremely concerning," Zonies said. "Because more and more people will be accessing the care they need in our emergency departments, which further strains our health care system's capacity and will limit access to other patients who also need those services."

And charity care, even as it can free patients from medical debt, presents its own knock-on effects, said Dr. Ettore Palazzo, chief executive at Kirkland's Evergreen Health, forcing strained finances for providers and increased medical costs for all patients.

"The bad debt that comes with this — at a time where the financial crisis for hospitals remains a reality — operating losses across the state and the challenges that will come with Medicaid cuts will continue to be real for us," Palazzo said.

If the ACA's tax credits expire, says the Robert Wood Johnson Foundation, U.S. hospitals, physicians and other providers will face more than $32.1 billion in lost revenues and see a $7.7 billion spike in uncompensated care.

For larger hospitals in larger cities that's a challenge. For smaller hospitals in the state's more rural areas, it could be existential, Murray said, again reducing access to health care in communities and distressing local economies.

"In many of my small towns in Washington state, the biggest employer is the hospital in that small town," Murray said. "If they shut their doors, every one of those people will be without a job as well."

The last time the federal government was shut down in 2018-19 — for a record 35 days — was over a disagreement of funding for President Trump's border wall.

This time — with government services, operations and pay for federal workers on hold, along with the looming possibility of crushing increases for health care premiums for American families and deep losses for the nation's health care economy — members of Congress need to focus less on who'll get the blame and more on addressing the issues in front of them.