Loss of enhanced health insurance credits will hit Vermont the hardest, according to Public Assets Institute

MONTPELIER – A new report from a nonpartisan, nonprofit group says Vermonters will be hit particularly hard should the health insurance tax credits at the heart of the ongoing government shutdown dispute be allowed to expire.

Public Assets Institute released a report last week saying up to 30,000 Vermonters will see their premiums increase dramatically at the beginning of the year if the credits end.

The information in the report largely comes from the Department for Health Access and KFF, the latter being a national health care organization formerly known as The Kaiser Family Foundation, said Stephanie Yu, executive director of Public Assets Institute.

"There's a lot of people who are really scared about what the January bill is going to look like, because we're talking crazy numbers," Yu said.

According to the report, released Friday, Vermont's health care exchange was created in 2014 as required by the Affordable Care Act passed by the federal government four years earlier. People using the exchange get federal premium tax credits based on the cost of the base silver plan, and their income.

In 2021, because of the pandemic, the American Rescue Plan Act boosted the premium tax credits and expanded who was eligible for them for the years 2021 and 2022. The Inflation Reduction Act then extended these until 2025, according to the report.

Under the enhancement, the full cost of the silver benchmark premium is covered for people making less than 150% of the federal poverty level. People making between 150% and 400% of the federal poverty have it partially covered, while people earning more than 400% also get some assistance.

According to the report, Vermont offers some assistance to those under 300% of the federal poverty level, and helps with out-of-pocket costs as well.

The report estimates that $350 million, mostly in federal tax credits, went to about 30,000 Vermonters in 2025, with $65 million of that being enhanced credits. The state provided $6.2 million. About a third of the people getting credits were between 55 and 64 years in age.

"Over 90 percent of exchange participants qualify for federal subsidies, and about a third receive the additional state support," reads the report. "The average federal credit for Vermonters is $11,400. That's a big increase over 2015, before the enhanced credits took effect. Then, 22,500 Vermont recipients received an average credit of $3,300. Much of the increase occurred in 2024 and 2025, after the temporary pandemic expansion of Medicaid ended."

Everyone receiving credits will end up paying more should the enhanced credits expire, according to the Public Assets Institute. People under 400% of the federal poverty level will see between 0.5% and 4.6% increase, while those over 400% will be paying the full cost of the premium.

"Because Vermont has the highest premiums in the country and some of the fastest growth in costs in recent years, Vermonters will be hit particularly hard," reads the report, stating that a person making $63,000 a year will be paying $15,000 for health care premiums while a family of four at the same place above the poverty level would see a $30,000 per year increase.

Yu said that when the credits were enacted, there was an increase in enrollment, meaning it's likely that many will forgo health coverage altogether. It's expected that more people will turn to the emergency room for health care, driving up the cost for everyone else.

"Right now the state provides additional premium assistance to everybody under 300% of the poverty level," said Yu. "They could take that level up, either get rid of the limit or take it higher and temporarily fill in for the enhanced credits."

This could cost Vermont about $65 million annually, said Yu, a big number but not an undoable one.

"Although we've also got SNAP and Medicaid cuts coming, so there's not going to be any shortage of demands," she said.

Cuts to Medicaid are in the "Big Beautiful Bill Act," while the current shutdown is impacting the Supplemental Nutrition Assistance Program (SNAP) and the Low Income Home Energy Assistance Program (LIHEAP). The Legislature and the Scott administration have announced they plan to find a way to fund SNAP through November, and make sure LIHEAP is available.

Earlier this month, U.S. Sen. Bernie Sanders stated that should the enhanced tax credits be allowed to lapse then Vermonters would see their health care costs rise substantially.

"I will not vote to substantially raise health care costs in Vermont for tens of thousands of people. I will not vote to throw 45,000 Vermonters off of their health care. That's what the shutdown debate is all about," Sanders stated.

U.S. Sen. Peter Welch released a similar statement, saying millions of people across the country will find their health care costs are unaffordable should the tax credits not be extended.

"Republicans once again chose to turn their back on Americans' health care. If they wanted to keep the government open, they would have returned to DC and taken a seat at the negotiating table with Democrats to protect health care for working Americans. I won't just stand by and support their plans to rip away health care from millions. This is not what the American people want," stated Congresswoman Becca Balint in a release at the end of September, as the government shut down.

National media reports on Monday indicate the shutdown isn't likely to end soon.

keith.whitcomb

@rutlandherald.com