The Club PUBlication 12/16/2024

Mad about egg prices?
Wait ’til you see coming insurance hikes.
JILL BURCUM Columnist

"Forget egg prices – your insurance renewals are about to deliver a real blow. Car, health, home...everything's surging. The insurance industry is fighting to stay afloat, and you'll feel the impact." 

More than 21 million Americans buy their own health insurance through MNsure and other Affordable Care Act marketplaces instead of getting it through an employer.

Ensuring that they continue to have accessibly priced coverage should be reason enough for Congress to continue the more generous ACA financial assistance put in place during the COVID-19 pandemic and then extended through 2025 with passage of the Inflation Reduction Act.

But if that argument isn't persuasive enough, lawmakers should consider what else is at stake: their political survival.

Because if they don't keep this aid in place, there will be millions of angry consumers facing eye-watering price hikes for 2026 coverage.

And because most people choose a health plan in the fall for the coming year, this sticker shock will become apparent well before the 2026 midterm elections, when the entire U.S. House and some U.S. Senate seats will be up for election.

Elected representatives inclined to brush off this issue, or to use it as a chance to strike a blow at former President Barack Obama's health care reform law, do so at their political peril. Rising costs for eggs and other household essentials are widely considered to have "dampened enthusiasm" for Vice President Kamala Harris.

But Republicans will control both congressional chambers and the White House beginning next year. Who do you think consumers will blame if the cost of their monthly insurance premium increases by 97% or even 116%? Those breathtaking projected increases come courtesy of KFF, a respected nonpartisan health policy organization.

Its analysts have calculated how much more people in various states would pay if the enhanced ACA aid expired.

Minnesota isn't among those states, but its neighbors are.

In Iowa, "premium payments would increase 97%, or $1,080 annually, from $1,116 to $2,196 per year." In South Dakota, "premium payments would increase 116%, or $1,284 annually, from $1,104 to $2,388 per year."

North Dakotans can expect a 91% increase, which translates to an additional $1,080 a year.

​Wisconsin residents could see an 85% increase, meaning their coverage could cost another $1,200 a year.

As shocking as those price hikes are, other areas could fare far worse. In Wyoming, KFF projects a 195% increase, requiring consumers to cough up close to $2,000 a year more. Mississippi consumers could see 160% increases. In general, southern states will get hit the hardest.
It's frustrating that KFF's analysis didn't include Minnesota.

But KFF recently released a tool allowing consumers no matter where they live to gauge the impact of the ACA subsidies' expiration. To use it, go to tinyurl.com/CalculateIncrease.

MNsure has also run some state-specific projections.

Officials project that 62% of all MNsure consumers, which translates to roughly 81,000 Minnesotans, will see higher costs if Congress doesn't act.

And "over 18,600 MNsure enrollees will lose access to all financial help."

The marketplace's analysis also suggests that some Minnesotans will get hit harder than others. "The single largest age group that would be affected is 55-64 years old," offi cials conclude. That's unfortunate.

Affordable coverage through the ACA has helped many retirees bridge the coverage gap until Medicare's traditional eligibility age of 65. The ACA has also aided many who are self-employed.

Where state consumers live could have an impact as well, according to MNsure. In southern Minnesota, for instance, 81% of MNsure enrollees will see higher costs, with an average net premium increase of $220 per month. In western Minnesota, 74% of enrollees can expect increases, with an average net premium increase of $175 per month. In the state's northeast, 71% of enrollees will face higher premiums, with an average monthly increase of $179.

The reason for the location variation: Health insurance plans are allowed to charge different rates by geographic area. Consumers in high-cost areas benefit more from the ACA's aid and thus are likely to feel the impact of aid's rollback more than others.

Minnesota coverage costs could go even higher because of the looming expiration of the state-run "reinsurance program," which works in a different way to cushion against individual market price hikes. Minnesota Council of Health Plans CEO Lucas Nesse has long been sounding the alarm about this double whammy and said Monday that "very few can reasonably be expected to budget" for the coming increases if no action is taken.

"Many Americans don't even realize we're on the edge of this health care cliff that will harm them directly," said Sen. Tina Smith, D-Minn. "It's not right, it's not sustainable, and we need Republicans to join us and extend these enhanced credits so we can give families peace of mind."

Unfortunately, it appears that the incoming Congressional leadership's first 100-days plan includes ending the ACA's more generous aid, according to the Associated Press this week.

Cost will likely be an argument against the aid's extension.
The price tag of the subsidies, which come in the form of tax credits, is estimated at $33.5 billion annually over 10 years. That's a large sum, but consider the cost of the tax exclusion for employer-provided health insurance: $299 billion in income and payroll taxes in 2022, according to the Tax Policy Center.

If the nation is willing to provide an enormous subsidy through the tax system for employer coverage, it ought to do the same for farm families, entrepreneurs and early retirees who don't have insurance through a job.

Congress should act, and quickly. If consumers are already mad about the price of eggs, just wait 'til they get a load of the coming health insurance hikes.

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