On July 19, executives across the 19 state-based health insurance marketplaces (SBMs) sent a letter to Congressional leaders calling for the permanent extension of health insurance premium affordability measures slated to expire at the end of this year. The letter comes as Congress debates a budget reconciliation bill, which must be passed by September 30. Given many competing priorities and challenging legislative calendars, time is running short for Congress to act if an extension of premium relief is to be passed in this budget bill.

The premium affordability measures were originally included as part of the 2021 American Rescue Plan Act (ARPA) and provided support to individuals and families who purchase insurance through the health insurance marketplaces (generally those who do not have access to employer-sponsored coverage or who do not qualify for Medicaid or Medicare). The measures both increased the amount of tax credits individuals could access to lower their health insurance premium payments, as well as ensured that no individual would have to pay more than 8.5 percent of their income for a benchmark insurance plan sold through the health insurance marketplaces.

As noted in the SBM executives’ letter, “affordability is consistently ranked as the number one barrier to having health insurance,” and the increased affordability from ARPA drove record enrollments, including over 3 million new enrollees across the marketplaces (a 21% increase from 2021). This growth was especially notable among rural populations, young adult populations (ages 18 to34), and pre-retirees (ages 55+)—populations who often do not enroll in the marketplace because of cost barriers (for more about ARPA’s impact on coverage and affordability see: American Rescue Plan Tax Credits made Coverage more Affordable and Accessible to Millions). In addition, SBMs noted a trend of their customers “purchasing up” to plans with lower deductibles and cost-sharing “mak[ing] it easier for individuals to get necessary medical care.”

If ARPA’s premium relief measures are not extended, it is estimated that 3.1 million Americans will drop health insurance, erasing the coverage gains made during the past year. Those that remain covered will see significant cost increases. California’s marketplace, for example, estimates that over 1 million of its enrollees will see their net premium costs more than double. These increases are in part driven by anticipated substantial premium rate increases in 2023. Across 16 states that have released preliminary insurance filings to date, average requested increases range from 5.7 to 20.7%—including double-digit increases requested in Colorado, Connecticut, the District of Columbia, Maine, Maryland, New York, and Vermont.

According to these filings, the requested increases are primarily the result of medical inflation and costs associated with COVID-19 (both for continued disease treatment and for pent-up demand for services neglected during the pandemic). While these preliminary filings do not reflect final negotiated rates, they indicate that premium cost increases will be widespread across states and significant for consumers. At the same time, with inflation, consumers are grappling with rising costs of everything from food and gas to housing. Without the increased affordability enabled by ARPA—families will be forced to make difficult decisions to forgo coverage or purchase lower-cost plans that provide fewer financial protections (e.g., plans with higher deductibles and cost-sharing).

As the situation evolves, the marketplaces are continually updating their projections and analysis of how consumers may be impacted if ARPA’s affordability measures are left to expire. (For state-specific analysis and resources see: State-Based Marketplaces Say Many Will Lose Affordable Coverage if Premium Assistance Expires). NASHP will continue to update resources as deliberations over the extension of ARPA continue.

NASHP is home to the State Health Exchange Leadership Network, a consortium of state leaders and staff dedicated to the operation of state-based marketplaces and state-based marketplaces that use the federal platform.