Health insurance for low-income Mississippians will jump 160% when Biden-era subsidies end

Health insurance costs will increase an average of $480 annually or 160% for Mississippians on the Affordable Care Act marketplace health insurance exchange in 2026 unless Congress takes action to extend federal subsidies.

The enhanced subsidies that were enacted during COVID-19 and extended through the federal Inflation Reduction Act are scheduled to end starting in 2026 unless they are renewed by Congress. The enhanced subsidies have led to large increases in marketplace participation in Southern states such as Mississippi.

According to a report by KFF, a national non-profit that focuses on health care issues, there are 280,000, mostly low-income Mississippians receiving health insurance through the marketplace exchange. The vast majority of those fit into income categories that receive federal subsidies to help pay for the cost of health insurance. And most of those on the exchange in Mississippians fall below 150% of the federal poverty level (income of $22,590 a year or lower for an individual) and can receive insurance with little or no monthly premiums. The low-income policyholders, though, still pay deductibles and out of pocket expenses.

If the enhanced subsidies expire, smaller subsidies would still be available through the Affordable Care Act for low income people who have health insurance policies through the marketplace. But many middle income people garnering insurance through the ACA exchange would no longer qualify for any subsidies to help pay their costs.

The November outcome of the 2024 presidential election and congressional races across the country could determine whether the subsidies are renewed.

KFF speculates that if Vice President Kamala Harris, the Democratic nominee for president, wins election this November she would attempt to extend the enhanced subsidies that were enacted as part of legislation championed by outgoing President Joe Biden.

It is not clear what action Trump would take on the enhanced subsidies if elected, but during his first term he is credited for action that harmed marketplace participation. The Center for American Progress said the Trump administration reduced outreach effort designed to let people know about the marketplace and reduced the time period to sign up for marketplace policies. Plus, he attempted to repeal the ACA. During his current campaign, Trump at times has spoken about wanting to improve the ACA and at other times talked about repealing it. He has offered no specifics, according to a KFF analysis.

"If the enhanced subsidies expire, almost all ACA Marketplace enrollees will experience steep increases in premium payments in 2026. However, the subsidies come at a steep cost to taxpayers," the KFF study said.

The enhanced subsidies have reduced premiums nationwide by an average of 44%. But to renew and expand them for 10 years would cost $335 billion, the Congressional Budget Office estimates.

The KFF study — Inflation Reduction Act Health Insurance Subsidies: What is Their Impact and What Would Happen if They Expire – estimates that nationwide 21.4 million people receive health insurance through the exchange and 19.7 million of those people receive the enhanced subsidies. Because of legislation passed during Biden's tenure, people earning less than 150% of the federal poverty level pay little or no monthly premiums. If the enhanced subsidies go away, KFF estimates premium costs will be $780 annually for low-income Mississippians.

The KFF study said the subsidies are having the most impact in Southern states.

The study said, "At least 10% of the population is enrolled in ACA Marketplace plans throughout all congressional districts in Florida and South Carolina, along with most in Texas, Georgia, and Utah. In Florida, there are nine congressional districts where at least 20% of the population is enrolled in a marketplace plan."

The marketplace exchange is most impactful in states that have not expanded Medicaid to provide health care for the working poor. Only 10 states have not expanded Medicaid, including Texas, Florida, Mississippi, South Carolina and West Virginia in the South.

According to an NBC report, the five states that had the largest increases in marketplace participation between 2020 and 2024, which covers the time of the enhanced subsidies, are all Southern states that have not expanded Medicaid.

They are:

* Texas, 195% increase

* Mississippi, 172%

* Georgia, 165%

* Tennessee, 160%

* South Carolina, 154%

With the exception of Georgia, all are states that Trump won in 2020 during his unsuccessful reelection effort.

Low-income people earning up to 138% of the federal poverty level (about $20,700 for an individual) can obtain coverage through Medicaid in states that have expanded Medicaid instead of having to rely on the marketplace plans.

People earning less than 100% of the federal poverty level cannot obtain coverage through the marketplace and have no other option for health insurance in states, such as Mississippi, that have not expanded Medicaid.

Both Medicaid expansion and the marketplace are components of the Affordable Care Act.

-- Article credit to Bobby Harrison of Mississippi Today