Health insurance costs for people who buy individual coverage through the Affordable Care Act could spike next year, affecting thousands of people across Washington state.
Policy analysts are warning that the expiration of some premium tax credits next January will lead to significant out-of-pocket premiums – perhaps up to 75% higher – for ACA marketplace enrollees in Washington state.
According to an analysis from Kaiser Family Foundation, this could increase by 75% for the average person, while people in rural communities could see an increase of much more, both individuals and families.
“A 60-year-old couple living in Pend Oreille County could see their monthly premiums increase from $581 to $1,835,” said Matthew McGough, a policy analyst at Kaiser.
One solution for people trying to curb the increase in cost is to purchase cheaper coverage, which might conversely increase that out-of-pocket cost, should they need unexpected medical care.
“Switching to a (lesser) plan might make sense for them. It keeps the premium a little bit lower, but they have to be prepared to pay more for health care, and potentially would need to make sure that they have enough savings if a medical emergency were to happen,” McGough said.
“Other people may have to find that they need to switch jobs now to find a job with employer coverage, but that can come with a big sacrifice, like giving up their own small business for the flexibility that comes with gig work,” he continued.
Most people in Washington are either insured through company plans or are enrolled in Medicare or Medicaid.
At a press conference at Washington State University’s Spokane campus earlier this month, Sen. Maria Cantwell addressed the short- and long-term effects of rising health insurance costs. Cantwell was joined by Bidisha Mandal, professor and associate director of School of Economic Sciences at WSU; Gina Wolf, owner and operator of Wolf Chiropractic; and Nicole Sohn, founder and owner of Journey DiscoveryCenter.
During the conference, Mandal warned of the loss of premium tax credits that are part of the ACA. The federal subsidies have helped reduce monthly health insurance premiums for individuals and families with low to moderate incomes since 2021, in the wake of the coronavirus pandemic.
“At this point, we will revert to the pre-2021 system,” Mandal said, which means “higher contributions from enrollees and a maximum income cap for eligibility. That means, for instance, individuals earning more than $63,000 or families of four making over $129,000 in 2025 would no longer qualify for any subsidy.”
Cantwell said about 300,000 Washingtonians receive coverage through ACA marketplace plans, including about 20,000 in Eastern Washington and roughly 56,000 business owners across the state.
“Now is not the time to basically cut Medicaid and have impacts on the system. Now is the time to make sure that we’re continuing to get coverage, lower costs and help Washingtonians on affordability, when affordability is such a critical issue across many fronts – food, household goods and a variety of other things,” Cantwell said.
“Let’s not make healthcare more expensive,” she said.
Cantwell also noted that the Washington Office of the Insurance Commissioner announced that insurance companies are requesting a 21.2% base rate change increase for health insurance premiums to address the expiration of the tax credits.
McGough said this creates a “double-whammy effect” with the 75% increase on top of the 21.2% increase from insurers.
“But these two increases are intrinsically tied, because the increase in monthly premium payments, after subsidy, by over 75%, will cause lower cost enrollees to be priced out of individual market coverage. This leaves a relatively ‘sicker’ and higher cost group of enrollees for insurers to cover, which will drive premiums higher than they otherwise would increase,” McGough said.
Wolf said the majority of people who benefit from the premium tax credits are older adults, rural residents, freelancers and small business owners.
As a small business owner herself, she said that offering employer-sponsored coverage can be difficult.
“We don’t often think that an employer-sponsored health plan can actually be a hindrance to our employees, because we’re able to offer the group plan that we can afford, oftentimes, that (keeps) our younger employees from staying on their parents’ plans,” Wolf said.
Sandra Johnson, a health care attorney based in Tonasket, said she is “greatly” concerned for her rural neighbors and others across Washington.
With the new federal funding bill already putting financial pressure on rural hospitals, she said the last thing high-risk populations in these areas need is to worry about soaring insurance costs.
“What we’re talking about here is downstream effects that are going to take a while to manifest,” Johnson said. “That Big Beautiful Bill is going to hurt more people over a shorter period of time than anything else this government has done in a very, very, very long time.”
While Johnson said she represents only health care entities, such as critical access hospitals and larger hospitals across the country rather than health care consumers, she said this is all tied together.
“This is going to hurt your neighbors and your friends, and the people who are in Congress right now are the people who put us here,” Johnson said. “I think that is one of the saddest things I’ve ever seen in my lifetime.”
