Health insurance 'crisis on our hands': Many could see ACA, other premiums doubling

Just about everyone with health insurance knows by now that keeping the same coverage will be a lot more expensive in 2026.

Those receiving the temporary premium tax credits from 2021's Affordable Care Act expansion have gotten the most attention, and not without reason. The trade group Oklahoma Association of Health Plans says ACA base premiums are rising 29% — and costs to many policyholders will be even greater if, as appears likely, the premium tax credits are allowed to expire at the end of December.

But Medicare premiums are also sharply higher — almost 10% — and consultant Mercer says group plan costs are rising 6.7%, the most in 15 years.

"We're seeing increased costs across multiple markets due to things like the increased cost of pharmaceuticals. ... Things like inflation are going to be reflected in the premiums for this year," said Haley Faulkenberry of Oklahoma Association of Health Plans.

"On the ACA marketplace, we're seeing historic premium increases."

Advocates such as Faulkenberry and OAHP — and many Democrats — put the blame squarely on the approaching expiration of the extended premium tax credits.

That argument became the cause around which Senate Democrats rallied to hold up federal spending authorization for 40 days. Senate Republicans finally agreed to a vote on the matter before the end of the year, but there's no clear idea what could pass both chambers and be signed by President Donald Trump.

Driving policyholders out of the system

ACA health plans currently are subject to two types of subsidies. The original subsidy, strictly to income and generally available only to low earners, is not changing.

The second subsidy, temporarily implemented in 2021, determines eligibility by determining cost as a percentage of income. This is the one scheduled to go away at the end of the year.

Without the subsidies, some policyholders will see their out-of-pocket costs rise as much as 400% — which is expected to make some of them ex-policyholders.

About 275,000 Oklahomans have health insurance through the ACA marketplace. Almost all receive some sort of subsidy.

Seven insurance carriers offer ACA plans in Oklahoma, but only one, Blue Cross Blue Shield, is in all 77 counties. Because of the way the ACA is set up, the other six providers essentially pay Blue Cross to cover patients in counties with the least chance of making a profit.

Mike Rhoads, Oklahoma's deputy insurance commissioner, said policyholders hit with premium increases should check with other providers or ask about lower-priced policies, including short-term ones.

Such policies typically have higher deductibles and co-pays and may offer less coverage.

Rhoads and Faulkenberry agreed that some people, and maybe a lot, will opt out of insurance altogether. Experience shows these are more likely to be young, relatively healthy individuals.

"Some will say, 'I don't have any dependents. I'm 31 years old. I'm in perfectly good health. I'm not going to have any insurance,'" said Rhoads.

"People are going to make those decisions if they feel like they can dodge the bullet and not have a car wreck or skiing accident where they have $100,000 repair of a leg after post surgical care and everything else."

The problem is that decision doesn't just effect that individual. Those who do "dodge the bullet" would have been paying into the insurance pool, lowering the cost for everyone else.

Those who don't often wind up leaving behind big bills that providers and other patients have to pay for.

'Loosey-goosey' guidelines on extended ACA benefits

"The enhanced subsidies increased the ACA enrollment here in Oklahoma by about 40 or almost 50%," Rhoads said. "The uninsured rate here has gone from 13-14% three years ago down to about 11%. … In our discussions with (health care) providers, particularly health systems, there's a little bit of hand-wringing going on with respect to the potential of large uncompensated care through the health systems."

But Rhoads and many others say simply renewing the subsidies is not a good solution. U.S. Sen. Markwayne Mullin and some of his Republican congressional colleagues call the credits an ill-considered subsidy for insurance companies.

Rhoads doesn't go that far but did say: "The subsidy is paid to the insurance companies, so they're all in on this thing. They can sell an $800 base policy for $200 to the consumer. The consumer pays their $200, and (insurers) receive the $600 subsidy directly from the federal government.

"The subsidies have really masked the true underlying cost of health insurance, at least in the ACA market," Rhoads said. "We note that even in the non-ACA market."

One fundamental tenet of the health care industry is that it should cost enough to discourage unneeded utilization. The argument is that the extended ACA benefits are too generous and encouraged people to overuse the health care system — or at least increased demand for health care services enough to raise prices providers could charge.

Another criticism of the benefits is that they've been too easy to game.

"Because the guidelines were so loosey-goosey, there was a lot of fraud taking place," Rhoads said. "We have had — I'll just call it dozens of complaints where individuals have been unwittingly signed up for an ACA plan."

Faulkenberry, of the Oklahoma Association of Health Plans, acknowledges the credits have flaws but said that is no consolation to people finding themselves priced out of health insurance.

"We're always ready to come sit down with elected officials and talk about that, but we can't lose sight of the fact that, right now, we have a crisis on our hands, and reform may take time," she said. "However, you've got Oklahomans and Americans across the nation that are looking at their premiums doubling, and so that's why you see folks … saying, 'Hey, instead of it being a cliff … should we wind this down so it's not as painful for Oklahomans as we're looking at?'"