Here's what could happen if Obamacare subsidies aren't extended

0:00The country is about a month into a government shutdown with the Affordable Care Act, also known as Obamacare, still at the center of the fight. Democrats are still holding out for a deal to extend the tax credits that help people pay for health care through the ACA exchanges, warning that without those subsidies, health care costs would skyrocket for millions. It's been a concern for many, including Laura Reynolds and Lynn Churnin. They're close friends, both living in Tampa, Florida, both in their 50s, and they both recently separated from their jobs, losing their private health insurance in the process.

0:36Reynolds has chronic health issues and needs to see a specialist regularly. Very new and very scary to me that, you know, having what I have and my health issues not having health insurance. Chernin also knows the importance of affordable coverage, especially after a recent medical emergency that her previous plan didn't cover. I had emergency gallbladder surgery and I got a bill from the hospital for$85 ,000. dollars. Now she and Reynolds have plans through the ACA marketplace, and they've both been pretty happy with the coverage and costs. Here's Chernin again. It's significantly better. I mean, the premiums are great.

1:14The co-pays are amazing. You know, I feel very, very lucky. And Reynolds was able to find an ACA plan with a$0 premium that also covered her expensive prescriptions. Amazingly enough, it almost seems to cover better medication than my own insurance I was paying almost$1 ,000 a month for. Consider this. Without a plan to extend the subsidies that have helped make Obamacare more affordable for people like Reynolds and Chernin and open enrollment starting in just days, what happens next?

1:49From NPR, I'm Juana Summers.

1:59It's Consider This from NPR. Lynn Churnin and Laura Reynolds of Tampa have been bracing for this week. The enrollment period for the ACA marketplace opens this Saturday, November 1st. And this past Wednesday, window shopping became available in many states, including in Florida, meaning that people could get their first glimpse of how much their plans might cost next year. But here's one plot twist. When Len Churnin logged on, she found her costs won't change much at all. My insurance premium would only be going up about a dollar a month. Reynolds, on the other hand, remember, she currently has that zero dollar monthly premium.

2:36She learned that without subsidies, she'll have to pay more than$450 a month. But she still says that's doable in light of what she used to pay before Obamacare. Because it's still less money than I was paying out of pocket through my own company that I was working for. But there's still frustration for Reynolds, not due to costs, but the political fight over these costs. Her stepdaughter, a government worker, has been affected by the shutdown, a shutdown that persists as Democrats say they're fighting to keep health care more affordable for millions like her. It is very upsetting that the one thing that is shutting our government down right now is the fact that they're arguing over health care.

3:20You know, when you're talking millions and millions of people who are on Marketplace and then you have this small group of people who are determining our health and our future. Cynthia Cox conducts research on the Affordable Care Act for KFF, a health information nonprofit, and she's here to break down where things stand. Welcome. Hi, thanks for having me. Thanks for being here. So, Cynthia, I just want to start with reminding everyone what is really at the center of this shutdown fight, which is the enhanced premium tax credits, which are about to expire for people on Obamacare if Congress doesn't do anything.

3:51So just remind us if you can, how many people relied on those tax credits in this past year to help pay for health care? So 22 million people who buy their coverage through the Affordable Care Act or Obamacare markets get these enhanced tax credits. Some of them would have gotten the original Affordable Care Act tax credits, but these enhanced tax credits boost the amount of financial help that people are getting, and then they also make some people newly eligible for help that they would not have gotten before. Now, I know that KFF's research leading up to this week estimated that on average, most Americans would see what they're paying for their ACA health insurance more than double.

4:31The exact number was a 114 % jump again on average. Now, in the past day of quote unquote window shopping, is there any reason to believe that most people won't really see huge jumps in what they pay? I know that we heard from one person in Florida who told us that their costs are really not going up by all that much. So these premiums are really based on a formula. What someone pays is a certain percent of their income. So for the vast majority of people who get a tax credit, it's actually really easy to figure out how much more they're going to have to pay. So really, our estimate holds true that what people will pay will more than double on average.

5:09Of course, that's going to vary from person to person. Some people may not see much of a premium increase. Other people could see astronomical premium increases. But really, I think the reality is that on average, people's costs are going to double. There are some things that people can do to mitigate those costs. There might be a way to switch a plan, for example, instead of getting a silver plan. Someone might be able to get a bronze plan, which would have a lower premium, but it would have a much higher deductible. And so there certainly are trade-offs that people will have to consider. Cynthia, I mean, it's unclear what will happen on Capitol Hill.

5:46But even if lawmakers do find a way to end the shutdown, they come up with another plan to extend Obamacare tax credits into next year. At this point, with no plan in place, is the damage sort of already done? Can people still hold out hope for some sort of deal to extend subsidies? The longer this goes on, the more damage there could be. You know, what the concern is from an insurer's perspective is that people are logging on now and shopping for plans. And they're going to see these big premium increases. And that might be enough to scare them away. You know, that might be enough for them to just drop their health coverage.

6:18So that's what health insurers are concerned, that the healthier or younger people are going to be the ones that drop their coverage. And then they'll be left with a sicker average group of people who are signing up, meaning that their costs are higher and premiums have to go up even more. And also, just from a perspective of if you want more people to have insurance, then you want them to have full information of what their plans are actually going to be, how much their costs are going to be for next year. At the same time, though, there's still time for Congress to make a change if they do decide to extend the tax credits.

6:53Although people are able to shop right now, the tax credits do not actually expire until the end of the calendar year. So if Congress were to act before December 31st, then the enhanced tax credits could still go into effect in January. I do sort of wonder if you can paint like a really big picture of what this could all mean for health care across the board in the United States. For example, if people who are confused by all of this drop their health insurance, how might that affect, say, hospitals? Yeah, so that's the concern. I mean, I think, you know, there's expectations that if these enhanced premium tax credits expire, there could be another 4 million people who become uninsured.

7:32Add to that the another 10 million people who could be uninsured due to changes in the reconciliation package that was passed earlier in the summer that was known as the big, beautiful bill. You know, that's 14 million more uninsured people than otherwise would be the case. This has hospitals very concerned because if somebody shows up in the emergency room, the hospital has to treat that person. They have to stabilize them regardless of their ability to pay. So if they get an influx of uninsured people coming into the hospital, then that hospital could be put into financial strain. If they were already feeling those financial woes, that might be enough to get the hospital to either cut some services or close, and then that can affect the whole community.

8:14It could also have ripple effects into other forms of health insurance and that, you know, as hospital markets become more consolidated, then they may be able to negotiate higher prices from health insurance companies. Cynthia, you follow this so closely. So I wonder, is there any piece or part of this fight that you think that is not understood well enough, either by lawmakers in Washington or even by ACA enrollees themselves? I mean, I think there's been a lot of confusion over this concept of premiums because, you know, there's how much the insurance company charges for the premium. And that is going up 26 % on average.

8:51But then there's what the enrollee pays. And because most people on this market, you know, they get a tax credit so they only pay a certain share of their income. They're not really, you know, their costs are not as affected by what the insurance company is charging. Their costs are really affected by what Congress decides. So there's been a lot of focus on how much insurance companies are charging is going up. And that is true. It's going up a lot. But what people pay out of their own pockets is really more a function of what Congress decides. Does someone have to pay 1 % of their income, 2 % of their income, et cetera, et cetera?

9:26That's what this debate is about. So I think even in Congress, you hear some confusion over the insurance company charges. And I mean, that is an issue, and I don't mean to minimize that, but that's not really what's going to affect most of the people who are getting their coverage in this market. What affects those people directly is whether they get a tax credit and how much of a tax credit they get. So say you're a person who's out there beginning to shop for ACA marketplace insurance next year. What advice would you give them right now? If it were me, I would honestly wait a few weeks to shop.

9:58there still is some possibility that there could be a deal made and probably shopping over the Thanksgiving holiday is fine. That should give you enough time to look at your options and sign up for coverage. It's probably a good idea to decide on what your health plan is going to be before December 15th so that you can lock that plan in to start January 1st. Usually that's when you have to make a decision for coverage that starts January 1st. But if you wait a couple more weeks, you should still have enough time to sign up. That being said, if you think you're going to need someone to help you through the process, like an insurance agent or broker, or a health insurance navigator, then start trying to make that contact in those appointments now, because these folks are going to be very busy this year.

10:42Cynthia Cox, Vice President and Director of the Program on the Affordable Care Act for the nonprofit KFF. Thank you so much. Thank you. This episode was produced by Michael Leavitt. It was edited by Ashley Brown, Diane Weber and Nadia Lancey. Our executive producer is Sammy Yenigan.

11:02It's Consider This from NPR. I'm Juana Summers.