'We'll likely have to sell our house': skyrocketing premiums at heart of shutdown fight

WASHINGTON – For the last six years at open enrollment time, Tucson resident Tracy Barber has checked prices for the marketplace health insurance she has relied on since retiring.

This year's price hike is staggering. To keep her high-end gold plan, the monthly premium would jump from $863 to about $1,500. That's an extra $7,600 a year that she and her husband can't possibly afford.

Instead, she will downgrade to a silver plan with higher copays and a much bigger deductible. Even so, that will cost $1,350 a month – an extra $6,000 a year.

"I knew these subsidies were going to expire," she said, but "I wasn't expecting it to almost double."

Congressional Democrats' demand to extend subsidies set to expire Dec. 31 has been at the center of the longest government shutdown in history, which started Oct. 1.

Barber – an artist who retired in 2019 as a software quality assurance engineer – is one of more than 423,000 people in Arizona and 24 million nationwide who rely on the Affordable Care Act for insurance, though she won't have to pay the higher premium for long. In six months, she will turn 65 and qualify for Medicare.

The Inflation Reduction Act signed by President Joe Biden in 2022, during the COVID-19 pandemic, expanded subsidies. It also added enhanced premium tax credits for people with income over 400% of the federal poverty level – allowing millions of middle-income earners to receive assistance previously available only to low-income Americans.

The subsidies are on a sliding scale. People who earn just above 400% are perched on a "subsidy cliff" and will be hit especially hard when subsidies expire.

By some estimates, nearly 22 million people are at risk of being priced out of coverage.

Throughout the shutdown impasse, Democrats refused to support a temporary deal to reopen the government unless Republicans agreed to extend the tax credits.

Republicans, including President Donald Trump, refused to negotiate over the subsidies until a spending deal is reached to end the shutdown.

Late Sunday, seven Democratic senators and one independent who typically votes with Democrats gave Republicans the votes needed to advance a bill that would reopen the government through Jan.30.

Arizona Sens. Mark Kelly and Ruben Gallego denounced the deal as a capitulation, as did most other Democrats.

The stopgap measure doesn't include an extension of the ACA tax credits. But Senate Majority Leader John Thune said he will hold a vote in mid-December to decide the fate of the subsidies.

"For Democrats, they got a win with getting the government back running. However, they lost the policy hostage battle that took place," said Mike Noble, CEO of Noble Predictive Insights, a Phoenix-based nonpartisan polling firm.

In Arizona, more than 370,000 people received enhanced premium tax credits this year, according to KFF, a health policy research organization.

Without the subsidies, Barber expects that she and her husband – also retired but already on Medicare – will spend more than 20% of their fixed income on health care premiums.

"This insurance is more than $400 more than our mortgage," she said. "It's definitely going to put a dent in things."

Democrats have sought to exploit that impending pain by reminding voters about Republicans who haven't joined their effort to extend the subsidies.

Two such Republicans are Reps. Andy Biggs of Gilbert and David Schweikert of Fountain Hills. Their aides ignored repeated requests to discuss the issue.

Both are running for governor next year, and both represent plenty of constituents who face sky-rocketing premiums.

"The shutdown fight reinforced the perception of dysfunction" in Congress, Noble said. "Tying that to health care instability may hurt incumbents like Biggs and Schweikert, especially among the suburban moderates, even if their base remains loyal."

Noble said polling consistently shows cost of living and health care affordability are two top issues for Arizona voters.

"Voters may not know the legislative details, but they know when premiums go up and they know who's in charge when it happens," he said. "This isn't really a red and blue issue. It's a kitchen table issue and that's what moves suburban swing voters in Arizona."

Michelle Unger, 53, lives in Gilbert – part of Biggs' district.

She is a real estate agent and author. Like many self-employed people, she benefits from the Obamacare marketplace, which provides coverage for people without employer-provided insurance options.

This year, Unger has paid $2,100 a month for a bronze plan that covers her and her husband, a contractor, and their three children, all adults under age 26.

But that low-end plan has turned out to be insufficient. She has three autoimmune conditions, she said, and her primary care doctor is no longer in-network.

Unger said she has no choice but to move to a higher tier gold plan that, when the enhanced tax credits expire, will cost $4,170 a month.

"I literally felt like I got punched in the chest," she said. "I was so shocked to see how high it was going to be."

The sacrifices to cover the costs will be extreme, she said: "We'll likely have to sell our house. It just pushes us well above our current budget."

"I don't agree with the shutdown, but I do agree with the Democratic Party standing firm and saying that you need to concede and these discounts need to continue," she said.

Extending the credits would cost $60 billion over the next two years, according to the Congressional Budget Office. A 10-year extension would cost an estimated $350 billion.

Von Packard, 42, is a single dad and independent contractor who lives in Mesa, parts of which are represented by Biggs.

Packard switched from a bronze to a gold plan this enrollment cycle, too, to keep down copays for emergency room visits and mental health treatment.

He has been paying $49 a month.

The new coverage will jump to $719 – "more than I've ever paid in my entire life for health insurance."

"There's a lot of other things I would rather be doing with $700 a month. That is retirement right there," he said.

Packard said he has tried to voice his grievances to Biggs.

"I get calls every now and then to jump on his town halls, and he never listens to me," he said. "They usually shut me off when I start talking."

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