Washington impacts to health care if insurance subsidies lapse

Thousands of Washington residents who get insurance through an online marketplace known as the Washington Healthplanfinder are weeks away from the start of open enrollment. How much they’ll pay for health and dental coverage next year — and whether some will be able to afford it at all — remains an open question. 

The enhanced premium tax credit, a pandemic-era subsidy introduced in 2021, curbed costs for about three-quarters of the 286,000 Washingtonians who get insurance through the market place, will expire at the end of the year without action from Congress. 

Debates over that subsidy are at the center of the government shutdown. Democrats in Congress are demanding the Republican majority extend tax credit before they agree to approve funding that would reopen the government. Republicans so far have balked, leaving state officials concerned about what will happen if the credits expire. 

Premium costs are expected to rise by more than 60% for the average beneficiary buying on the market place, while some could pay up to two times as much. An estimated 80,000 Washingtonians are predicted to no longer be able to afford coverage.

Combined with Republican’s sweeping reconciliation bill adopted earlier this year — which is estimated to leave up to 200,000 without insurance largely due to changes to Medicaid — Washington could see its uninsured population double over time. That would put additional financial pressure on the state’s already fragile medical system. 

“Failing to extend these common-sense tax credits is one more way the federal government is making health care less affordable and less accessible to residents across our state,” Washington Gov. Bob Ferguson said in a statement. “Congress must act now to extend these credits and protect health care access for tens of thousands of Washingtonians.”

How would Washington hospitals be impacted?

People without insurance often delay seeking care until it is absolutely necessary, forgoing less expensive preventive care until they wind up in emergency rooms. For hospitals, many of which are already struggling and have experienced layoffs in recent months, that means more charity care, services provided to the uninsured without payment. 

To compensate, hospitals are likely to raise prices and lean more heavily on commercial insurance patients, said Ingrid Ulrey, CEO of the Washington Health Benefit Exchange. 

“The risk is a big increase in folks in our state who are uninsured and that impacts everybody,” she said. “We don’t want to destabilize our health care system.” 

Washington U.S. Rep Emily Randall, a Democrat representing the Sixth District, was not available for comment by press time. In a statement, she announced she had penned a letter to House Speaker Mike Johnson, demanding he call the House back into session. She blasted his unwillingness to negotiate with Democrats as a “betrayal of his duty to the American people.”

About 19,900 people in Randall’s district, which spans the Olympic and Kitsap Peninsulas, Gig Harbor and part of Tacoma, benefit from the enhanced premium tax credit, according to the Washington Benefit Exchange. 

“Every day of inaction is another day that families in Washington’s 6th District and across the country lose sleep worrying about how they’ll afford their medications, doctor visits, and chemo treatments,” Randall said in a statement. “I refuse to give up, and I refuse to look away while Speaker Johnson plays politics with people’s lives.”

Falling through the cracks 

Legislators have until the end of the year to extend the enhanced premium tax credit. But further delay is likely to add confusion and uncertainty, as it bleeds over into the open enrollment window. Starting Nov. 1, individuals can renew or purchase health and dental insurance coverage for the upcoming year on the Washington Healthplanfinder. 

Open enrollment is always stressful for staff at the Washington Health Benefit Exchange, who oversee the Washington Healthplanfinder marketplace. This year is particularly unique. When staff start sending out notices in late October, they will assume the enhanced tax credits will not be renewed, Ulrey said. They are ready to pivot if the tax credits do get extended, she said.

The Washington Healthplanfinder has for years caught people “who were falling through the cracks,” that lacked access to insurance, Ulrey said. Most, but not all, Americans fall into two camps: either they get insurance through their job or a government program, like Medicaid, Medicare or Tricare. 

The federal Health Care Marketplace was designed as a third option. Created through the Affordable Care Act, a federal law often called Obamacare, the marketplace provided a government-run platform for individuals to browse and purchase private insurance plans. Most states use the federal system, while some like Washington have a state based marketplace. 

Small business owners, those who are self employed, contractors, as well as individuals who retired before they are Medicare eligible, frequently rely on the marketplace to buy insurance. Rural areas have the highest percentage of people benefiting enhanced premium tax credit, Ulrey said. 

Opening the marketplace reduced the number of uninsured Americans, often allowing them to buy discounted insurance plans for themselves and their families. The Affordable Care Act capped premium prices on the marketplace for many enrollees at a certain percentage of their income. The enhanced premium tax credit, introduced in 2021, then lowered those caps further, while expanding eligibility for subsidies. 

Expanded benefits could be gone by January, with Washingtonians losing an estimated $285 million in savings. 

Even if the tax credits do ultimately come through, Ulrey fears some damage may already be done. Many customers could get “sticker shock,” from seeing the initial and large price increase and drop out. At that point, she says, it would be difficult to bring them back. It is also unknown at this point if savings would be applied retroactively, she said. 

“There has been remarkable progress and gains since the passage of the ACA,” Ulrey said. “Much of that is now in jeopardy.” 

Conor Wilson is a Murrow News fellow, reporting for the Kitsap Sun and Gig Harbor Now, a nonprofit newsroom based in Gig Harbor, through a program managed by Washington State University.

Correction: The number of people expected to lose insurance from Republican’s tax bill in Washington has been corrected from 250,000 to up to 200,000. This story has also been updated for clarity.