Many Virginians drop ACA coverage and more likely will, SCC hears

Tens of thousands of Virginians have dropped Obamacare coverage after costs soared, and tens of thousands more could do so in the next few days now that a grace period for paying premiums is ending.

Virginia's state-run health insurance marketplace for Affordable Care Act coverage ended its enrollment period with fewer people signed up — 371,000 versus 389,000 last year — and so far this year has seen roughly 33,000 more drop existing coverage, Kevin Patchett, director of the State Corporation Commission Health Benefit Exchange, told a commission forum Thursday.

The reason is cost: When President Donald Trump's big tax and budget bill last year ended enhanced tax credits, premiums in Virginia increased by an average of roughly 20%, although costs jumped far more for higher-income Virginians.

The credits eliminated or reduced Obamacare premiums for many, and that provided a subsidy for higher-income individuals who weren't entitled to them initially.

"The changes really began when our open enrollment period began, when we saw two and a half or almost three times the number of customers cancel health insurance compared to prior years. And as that trend has continued throughout this coverage year, the only significant difference that we've been able to identify is this cost difference," Patchett said.

"We understand that there are tens of thousands of Virginians who are on the cusp of losing their health insurance in the coming days, and we expect that the nearly 35,000 Virginians who've lost coverage since the end of open enrollment, that number may double or more within the next week or two," he added.

Many were automatically reenrolled in their plans when they didn't do anything during the enrollment period, and the 90-day grace period for paying premiums is expiring, said Doug Gray, executive director of the Virginia Association of Health Plans.

"It's hard to be sunny about the next couple of years when we're not looking at an increase in enrollment. I have a member who told me today they have 30,000 people in the grace period, who're on the exchange now. Will all of them not pay? Absolutely not. A bunch of them will wait till the last day. But others won't," he said.

"The way the exchange works, is they were automatically enrolled in a similar product, and so they didn't have to take any action. So when you have to take an action is really when the rubber hits the road," Gray said.

"If you haven't paid, which many have not, then that grace period starts. And so when we have significant percentages in the grace period, more than 10% in most cases, that creates a real concern that they won't pay by the end, or a significant percentage of them, so that shows that they haven't wrapped their hands around the situation," he said.

One big issue is who's dropping out.

With the ending of the enhanced credits, the biggest dollar jump in premiums came for individuals earnings 300% to 400% of the federal poverty level: $96,450 to $128,600 for a family of four.

"I think conventional wisdom said that's where we're going to see the biggest drop-off, people whose monthly premiums would change from $600 a month to $1,200 a month. Instead, where we're seeing the biggest change are individuals and families whose monthly premium went from $5 to $25, from $35 to $50," Patchett said.

Many of them are younger individuals, who tend to be healthier, which could be an issue.

Ending the enhanced credit has meant "that gap of not having to pay a premium at all, but now paying $20, is leading to disenrollment. And so is that a problem? You bet it is, because … if you don't have a healthy pool, you don't have a successful marketplace," Gray said.

He warned that going forward, people who are currently paying their monthly bills for coverage could also decide to let coverage lapse as bills roll in later this year.

"We've talked about being at risk of losing over 100,000, and you know, at this point, we're not there, yet. Doesn't mean that it can't get worse," Gray said.

"It probably will, but let's put it in perspective ... remember, it's who's in the pool that matters just as much as the size of the pool," he said.

"A lot of folks who are in the pool are never going to leave the pool because they're sick and they need the coverage at any price. The subsidies from the federal government are substantial, even without the enhanced subsidies," he said.

"Could it get more expensive? Sure, if the pool gets sicker, absolutely," Gray said.

"Is it going to spiral right away? No, and I want to provide that reassurance," he added.

According to Tim Kaine, one of Virgina's two Democrats in the U.S. Senate: "President Trump and congressional Republicans' refusal to extend critical Affordable Care Act tax credits resulted in coverage being ripped away from tens of thousands of Virginians."

An effort after Trump's One Big Beautiful Bill passed to reinstate the tax credit passed the House of Representatives when nine Republicans defied GOP leadership to vote for a three-year extension, but the Senate has not acted.

"Families are already seeing premiums skyrocket — some doubling or even tripling — while a new report shows ten Virginia hospitals are now at risk of closure following Republicans' Medicaid cuts," said fellow Democratic Sen. Mark Warner. "The Senate should bring this bill to the floor and deliver real relief for millions of Americans."