Nearly 100,000 Kentuckians who signed up for health insurance through the state exchange will likely have to grapple with increased health insurance premiums. Expanded federal tax credits for plans under the Affordable Care Act are set expire at the end of the year and insurance carriers propose rate hikes to the unsubsidized cost.
That’s if Congress fails to extend the federal tax credits, which has become one of the Democratic sticking points more than a week into the federal government shutdown. While some Republicans have expressed support for some kind of extension, they have pushed back against doing so in the stopgap funding measure.
Premiums could more than double for many subsidized plans due to the expiring tax credits, health policy research firm KFF estimates.
The majority of Kentuckians who get their health insurance through the state exchange, called kynect, benefit from the enhanced tax subsidies — roughly 83,000 out of 97,000 people who signed up during the last open enrollment period. The Urban Institute estimates roughly 18,000 of those individuals will leave the marketplace due to higher costs and almost three-quarters of them will likely not find an alternative.
The cost of unsubsidized health insurance through ACA marketplaces is also expected to increase next year, due in part to the tax credit expiration. It’s the largest increase insurers have requested since 2018 when premiums increased sharply, according to KFF-Peterson.
Inside Family Health Centers in Louisville’s Portland neighborhood, Outreach and Enrollment Director Ashley Shoemaker said her team of state health insurance liaisons called kynectors are calling patients to let them know their premiums could rise when they re-enroll next month through kynect.
“We're going to have a lot of hard conversations with people,” Shoemaker said.
She said estimates show premiums will likely go up by an average of roughly $100 per month, but some people could see bigger increases. Shoemaker said the subsidies have encouraged many families to purchase insurance, especially lower income families — those under 150% of the federal poverty level — to get a plan with no monthly premium.
“When patients come in without insurance, that can impact their ability to get their prescriptions, it can impact their ability to see specialists and have follow up appointments, so the health outcomes are absolutely better for people that have health insurance,” Shoemaker said.
Who is affected
Without insurance, people may be less likely to seek proactive care and instead wait until an emergency forces their hand, said Priscilla Easterling, director of outreach and enrollment with Kentucky Voices for Health.
“They start relying on the emergency room as their doctor, as the place to seek treatment, which increases costs for hospitals, of course, but also increases the wait time in ERs,” Easterling said. “If they knew that they were covered and could safely and affordably go to a doctor when the symptoms first popped up … it would be much easier to resolve it.”
Easterling herself will be affected by the expiring credits as she accesses insurance through the kynect marketplace. Using a KFF tool that estimates the possible increase in premiums, Easterling said she could have to pay an additional $112 per month to stay on her current plan. She said with other price pressures weighing on homes like hers, tough choices are ahead.
“I am going to just have to really sit down and figure out what I can afford,” Easterling said.
Congress passed the enhanced subsidies as part of the 2021 American Rescue Plan Act. They lowered the caps on premium contributions, allowed lower income recipients to pay $0 for benchmark plans and expanded eligibility to more middle-income families if the premiums cost more than 8.5% of household income.
Cody Kremmer, also with Voices for Health, said he is personally expecting a hit to premium costs should Congress allow the subsidies to expire at the end of the year. He worries the sticker shock will cause many families to forgo insurance all together.
Kremmer, who now lives in Bowling Green but grew up in a family of farmers in Tennessee, said he is especially worried for families like his own that may rely on marketplace plans. They may not qualify for Medicaid, but they also don’t have access to employer plans and private insurers are too expensive.
“For farmers, the self-employed, for small business owners, nonprofits — I work for one — and especially for this new gig economy,” Kremmer said, “those are the people who have really come to rely on these plans.”
Awaiting Congressional action
In a letter last month, Democratic Gov. Andy Beshear, alongside 17 other Democratic governors, asked Congressional leaders to extend the enhanced premium tax credits, saying they benefit families, older Americans, small business owners and rural communities.
“If Congress acts quickly, states can lock in lower premiums and spare families a wave of sticker shock this fall. If not, the damage will be felt for years,” the coalition of governors wrote.
Reinstating the credits, and reversing recently passed cuts to Medicaid, have become a sticking point for Democrats on Capitol Hill as the federal government shutdown surpasses a week. At a Louisville Democratic Party organized demonstration, dozens of protesters lined the streets outside the Gene Snyder Federal Building in downtown Louisville. They held up signs deriding President Donald Trump and calling on Congress to protect health care saying "Healthcare not Wealthcare” and “Protect Medicaid not millionaires.”
Jill Sherman said she in particular was protesting health care cuts, including Medicaid slashes in the Republican-backed tax and spending spending bill. Sherman said those are the cuts people “are going to see and feel and live.”
“I know quite a few folks who aren't happy with the Democratic Party right now,” Sherman said. “And if they really show up that they're strong and fighting, that's going to help tremendously.”
Congressional Republicans have largely accused Democrats of trying to secure health benefits for undocumented immigrants, rather than their constituents. The enhanced tax credits were only available to legally present immigrants, with the passage of the July spending bill eliminating access for those with temporary protected status, asylees, refugees and survivors of trafficking and abuse, among others.
Some Republicans have indicated they might support extending the subsidies in some way, but leadership have rejected attempts to do so through the stopgap spending measure.
Kentucky U.S. Rep. Andy Barr, who is also running for U.S. Senate, said via X that he voted in favor of the “clean” continuing resolution that would maintain current spending levels through mid November because “hard working taxpayers deserve better.”
“Chuck Schumer, Hakeem Jeffries and most Democrats in Washington have decided they want to hold the American people hostage, demanding $1.5 trillion in additional spending and reinstating taxpayer funded healthcare for illegal aliens as a condition to re-opening the government,” Barr posted.
Increasing unsubsidized premiums
Jason Bailey, the executive director of the Kentucky Center for Economic Policy, said other elements of the Republican spending bill, dubbed the One Big Beautiful Bill Act, are likely to depress kynect enrollments. For example, the bill shortened annual open enrollment periods and eliminated automatic reenrollment for advanced premium tax credits.
The center’s data show that enrollment increased most rapidly over the last year among “young invincibles" — younger Kentuckians who are less risky to insure. But their participation allows insurance companies to charge lower premiums, Bailey said, because they balance out the riskier and more expensive patients.
“What that does is create an older, sicker pool of people who remain in the marketplace, and that makes costs go up for those who remain,” Bailey said. “Those young people go uninsured as a result, they're in serious trouble if they face an injury or an accident, they could be facing massive financial costs and risks.”
Bailey said insurance carriers are already developing their plans and increasing the cost of unsubsidized coverage. Insurance companies must submit rates annually to the Department of Insurance. The average rate increase across all states is 20% in Affordable Care Act marketplaces, according to a national Peterson-KFF analysis.
Shoemaker, with the Community Health Centers, said she hopes lawmakers act quickly to solidify the tax credits as Kentuckians begin shopping for their plans Nov. 1.
“December will be too late,” Shoemaker said. “When they see those increased costs, they're going to choose to cancel their coverage and walk away and not have health insurance. So we are in crunch time right now.”
