The longest government shutdown in U.S. history ended less than a month ago with a promise from Senate Majority Leader John Thune to hold a vote on extending temporary COVID-era premium subsidies for coverage under the Affordable Care Act. Without congressional action, these subsidies are scheduled to expire on Dec. 31.
The enhanced premium tax credits were initially included as part of the American Rescue Plan in 2021 and were extended through 2025 as part of the Inflation Reduction Act. As the annual enrollment period rolls on, those currently covered under a marketplace plan are learning how much their costs will rise. In many cases, the effective increase will be steep, and millions of participants will drop their coverage.
Over half of all Americans receive health care insurance through an employer, while around 40% are covered under Medicare, Medicaid or Veterans Affairs benefits. The remainder, between 40 and 50 million, are either uninsured or purchase their own coverage. The Affordable Care Act was passed in 2010 in an effort to provide more affordable coverage for those stuck in no man’s land. The program launched in 2014 to broad derision thanks to widespread website crashes and political opposition. Nonetheless, the ACA did partially succeed in adding 12 million previously uninsured to the rolls by 2021. Public opinion shifted as well, with 64% of Americans now supporting the ACA according to KFF (formerly the Kaiser Family Foundation).
Health plans offered under the ACA marketplaces are standardized to provide coverage for 10 essential services like emergency care, maternity, physician visits and certain preventive services with four categories of cost sharing between the insurer and the enrollee. Basic plans include bronze, silver, gold and platinum, ranging from the lowest premium (and highest out of pocket) to highest monthly cost and lowest deductible.
Plan premiums are set by the insurance companies that offer plans on the marketplace, subject to state regulations, geographic differences in health care costs and competitive conditions in each market. The Affordable Care Act allows insurers to charge more for family coverage, tobacco users and older enrollees. Insurers are no longer allowed to rate based on current health status or to exclude preexisting conditions, a practice that was prevalent before the passage of the act.