Texas bucks ACA enrollment trend

Cuts to federal subsidies for health insurance are driving people across the country to drop plans they bought through the Affordable Care Act marketplace -- but not in Texas.

A recent report by the think tank KFF found that 4.2 million Texans signed up for health insurance this year through the ACA, also known as Obamacare, 5% more than last year and one of the largest increases in the country. It comes as the number of enrollees nationwide declined 5% to 23.1 million. States including Arizona, Oklahoma and North Carolina saw declines of 15% or higher.

The upheaval in healthcare plans follows a decision by congressional Republicans last year to cut federal spending by letting expire what are known as enhanced premium tax credits.

Those credits were created during the COVID-19 pandemic to further lower premium costs for low-income families, while also expanding access to working-class families who had not qualified for subsidies when the original Affordable Care Act passed in 2010.

The difference in Texas seems to be a bipartisan law passed in 2021 that gives the state's Department of Insurance the power to limit how much insurance companies raise rates on certain plans bought through the ACA marketplace. So while costs on middle-tier "silver" plans might have increased sharply in Texas, premiums for so-called gold and bronze plans have stayed relatively stable.

The bureaucratic maneuver is known as "silver loading," said Alec Mendoza, a policy advisor with the non-profit Texas 2036.

"Our preliminary data showed 75% of enrollees in Texas are still eligible for low cost plans and the numbers bear that out," he said. "We've been preaching for people to go and shop around."

Texas is one of nine states to see enrollment increase this year for one reason or another. Some states like New Mexico and Massachusetts chose to help make up the loss of federal subsidies for their residents. Others, like Texas and Louisiana, not only have "silver loading" laws but also more uninsured residents because the state didn't expand access to Medicaid.

It's unclear how long the enrollment figures in Texas and other states will hold up. Every year, people sign up for government-subsidized health insurance plans and then decide to drop them when the bill comes due, with enrollment typically declining 5-10%, said Matthew McGough, a policy analyst at KFF.

"We expect it to be bigger this time," he said. "The first bill for people could come in January. Some people may pay for next few moths and decide its not something they can afford."

The U.S. Department of Health and Human Services is not expected to release enrollment data for the first three months of the year until this summer.

But already many health care experts are predicting a significant decline. Not only are the tax credits being rolled back, but premiums and deductibles rose significantly this year.

KFF is predicting that by the end of the year, only 17.5 million Americans will have government health insurance plans, a 17% decline from last year.