Health insurance sticker shock looms if federal subsidies expire

State House News Service

BOSTON - Bay Staters who receive insurance coverage through the Massachusetts Health Connector are learning how much their premiums will rise in 2026 if Congress does not extend subsidies that are at the crux of talks over reopening the federal government.

Open enrollment kicks off at the state health insurance marketplace on Nov. 1, and tens of thousands of residents could lose access to some or all of their subsidies. Enhanced premium tax credits are slated to expire at the end of the year under the 2022 Inflation Reduction Act, while other health care coverage disruptions are expected from the One Big Beautiful Bill Act.

U.S. Senate Democrats this month have rejected stopgap spending

MASSACHUSETTS HEALTH CONNECTOR VIA STATE HOUSE NEWS SERVICE

measures to reopen the government - which shut down Oct. 1 - as they look to preserve the enhanced premium tax credits that launched during the COVID-19 pandemic.

On its federal policy webpage, the Health Connector says "[m]any people will still qualify for financial help, but the amount will be smaller."

Households earning above 400 percent of the federal poverty level - about $62,600 for a single person or $128,400 for a family of four - will no longer qualify for heavily subsidized ConnectorCare coverage starting on Jan. 1. Instead, those members will need to "explore unsubsidized health plan options, which may result in higher out-of-pocket costs," the Connector says. "It is the case that this week, people can start to see those premium increases in their online member portal through the Health Connector, but the actual pieces of mail will likely be hitting people's mailboxes starting over the next several days, the next week or two," Health Connector Executive Director Audrey Morse Gasteier said during a press conference Thursday hosted by Congresswoman Lori Trahan.

"So we're still at kind of the very beginning stages of people actually getting exposed to those numbers, exposed to that information, that maybe this year they qualified for a tax credit that provided all sorts of financial supports that help them afford that coverage and as they head into 2026, that help won't be available anymore," Morse Gasteier said. "So those premium increases, that real net decline in that support, will really become real for people over the next several weeks."

ConnectorCare members who earn between 300 percent and 400 percent of the federal poverty level can still access subsidized care through the end of 2026, according to the Connector.

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Around 36,000 Health Connector members who are noncitizens but legally present here could feel the immediate impact of the One Big Beautiful Bill Act, Morse Gasteier said at a board meeting last month. Those members will lose eligibility for heavily subsidized ConnectorCare coverage starting Jan. 1, regardless of whether enhanced premiums tax credits are extended.

"We cannot afford to kick the can down the road as Donald Trump and Republicans in Congress are demanding," Trahan said. "Every day that they stall, every day that they choose partisan games over governing, they are gambling with people's health and their financial security."

In a television interview Sunday, Vice President JD Vance said the tax credits "actually go to a lot of waste and fraud within the insurance industry." U.S. Senate Majority Leader John Thune told MSNBC Wednesday that he's discussed with Democratic leaders a deal to allow a vote on extending the tax credits if they "included reforms."

Senate Democrats on Thursday rejected a stopgap spending bill for the 10th time as they continue to fight for the tax credits, the AP reported.

Enhanced premium tax credits started in 2021, and they've helped lead to enrollment in the Affordable Care Act Marketplace soaring from about 11 million people to more than 24 million people, according to KFF.

At the virtual press conference Thursday, Dr. Manju Mahajan, a family medicine physician at UMass Memorial Medical Center, referenced a patient who's a 52-year-old single mom who works two jobs and qualifies for tax credits. The patient's premium is currently $75 per month, and it could jump to $500.

"When we discussed this, she told me flat out that she would need to drop her coverage," Mahajan said. "So that means no mammograms, no routine blood pressure checks, and certainly no way to afford her asthma inhalers unless she wants to go in debt. Her story is not unique. It is what thousands of families will face if these credits disappear."

In an infographic explaining the loss of enhanced premium tax credits, the Health Connector highlighted a hypothetical 62-year-old couple living in Peabody who earns $85,000. Their monthly premium would rise from $892 to $2,096. A 57-year-old couple in Worcester who earns $85,000 and currently pays a $528 monthly premium could see that premium rise to $1,687.

Valerie Fleishman, executive vice president and chief innovation officer at the Massachusetts Health and Hospital Association, warned that eliminating the tax credits would be a "devastating blow to patients and to a health care system that is already under enormous strain."

The Massachusetts House passed a $2.25 billion spending bill Wednesday that restructures the hospital assessment program, which would deliver more funding to the Health Safety Net Fund to cover uninsured and underinsured care. The package also provides aid to former Steward Health Care hospitals.

"If these credits expire, 65,000 Massachusetts residents- enough to fill Gillette Stadium - could lose their coverage over the next 14 months and hundreds of thousands more would see their costs rise, putting care further out of reach," Fleishman said.

People who lose their health insurance delay or forgo care, which can ultimately make them sicker and land them in the emergency department, Fleishman said.

"That deepens the strain on our caregivers, worsens capacity challenges and leads to longer wait times and higher costs for everyone," she said. "For hospitals, the impact would be equally severe. As uncompensated care grows, hospitals absorb unsustainable losses, all at a time when the Health Safety Net that funds low-income, uninsured and underinsured residents is already facing a shortfall."

Health Connector staff are bracing for calls from members as they learn about premium hikes.

"When people's health insurance premiums spike, like we know is about to happen for hundreds of thousands of people at scale, the distress, the anxiety that it produces for people who are sitting around their kitchen tables trying to make ends meet and having to make tradeoffs between their transportation, and child care, and health care, these are extremely distressing situations for people," Morse Gasteier said. "So we get very escalated calls from people. We get people trying to understand what's happened, who did this, how come this happened, what am I supposed to do?"