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Millions Could Face Higher ACA Premiums, Lower Subsidies
The Affordable Care Act (ACA) is facing a double whammy in the form of double-digit premium increases and a sharp drop in federal subsidies. According to recent reports, most individuals enrolled in the ACA plan are likely to experience sticker shock.
As reported by CBS News, most insurers have proposed 15% rate increases for next year, with some states experiencing even steeper hikes. For instance, Maryland has seen requests ranging from 8.1% to a staggering 18.7%. Conversely, New York has experienced more modest increases of less than 1% and as high as 66%.
The proposed rate hikes are largely attributed to rising medical and labor costs, usage, and the uncertainty surrounding the expiration of enhanced tax credits. Insurers have included these uncertainties in their filings with state insurance departments.
Experts warn that such a drastic change could lead to significant financial burdens for consumers, resulting in many being unable to afford coverage. The average out-of-pocket expenses are expected to increase by over 75%. For those who don’t qualify for subsidies or see their assistance dwindle, this would be nothing short of catastrophic.
In contrast, some lawmakers on Capitol Hill are exploring options to temper the subsidy reductions. In a surprising move, Pennsylvania-based insurance broker Joshua Brooker revealed that certain politicians are consulting with the Congressional Budget Office about the fiscal and coverage effects of various scenarios, which do not extend the subsidies as they currently exist but may offer a middle ground.
One such possibility involves allowing subsidies for families earning up to five or six times the poverty level. However, this move would likely draw fierce opposition from conservative think tanks like the Paragon Health Institute. According to them, the more generous subsides led people to fudge their incomes and drove other types of fraud.
Source: www.cbsnews.com
