Idaho Consumers Face Rising ACA Premiums as Tax Credits Expire

Idaho residents are experiencing the first price increases in Affordable Care Act (ACA) marketplace plans amid the expiration of federal tax credits triggered by the government shutdown.

The public registration period for Idaho’s market began on October 15, with uncertain prospects for the premium tax credit enhancement. If Congress does not act, customers could see substantial premium hikes compared to last year.

Pat Kelly, executive director of Your Health Idaho, reported to The Hill that gross premiums have risen by about 10 percent on average. Meanwhile, net premiums—the amount consumers pay after applying tax credits—are up approximately 75 percent.

“These figures reflect averages across all enrolled participants, showing an overall increase and what consumers actually pay,” Kelly explained.

The enhanced tax credit, introduced in 2021 by the American Rescue Plan, has been extended until the end of 2025 by the Suppression of Inflation Act. This enables households earning more than 400 percent of the federal poverty level to benefit from lower premiums.

According to Kelly, of the 135,000 enrollees in the Idaho marketplace, around 13,000 have incomes at or above 400 percent of the federal poverty level. Without congressional action, this group will lose their access to the tax credit, and many are likely to remain uninsured.

Automatically re-enrolled individuals may overlook some of the premium increases in their monthly costs.

Eligibility for tax credits doesn’t depend solely on income; factors like age and location also play a role.

The premium tax credits are determined by the second lowest cost Silver plan in the region. Given that younger customers usually pay lower rates, they might not be eligible for credits, even if their income is below 400 percent of the federal poverty level.

Gideon Lukens, a director at the Center on Budget and Policy Priorities, pointed out that the increases faced by Idahoans aren’t particularly large. He noted that a 60-year-old couple could expect an annual premium increase of about $18,000, which aligns with broader trends.

“States that have started window shopping for plans show average increases for such couples typically exceeding $20,000 annually,” Lukens added.

Window shopping periods have commenced in several other states, including California, Georgia, and Kentucky.

The relatively minor impact observed in Idaho illustrates how the ramifications of ACA tax credits can differ from state to state.

A significant factor is whether a state has expanded Medicaid. In those states, individuals making up to 138 percent of the federal poverty level can qualify for Medicaid. In contrast, those in states without expansion, who also weren’t eligible for Medicaid, rely heavily on ACA tax credits.

Analyses suggest places like Mississippi and Tennessee could see larger rises in uninsured rates if enhanced tax credits cease. Further, some congressional districts in states like Wyoming and West Virginia are anticipated to experience substantial monthly premium increases.

“The most notable disparities appear where poverty levels exceed 400 percent,” Lukens said. “People in this bracket will end up paying premiums entirely out of pocket without any income cap once enhancements expire. So, the situation is very much dependent on state-specific premium rates.”

Insurance premiums are also set to increase due to a shrinking risk pool.

Lukens highlighted that healthier individuals are more prone to forego insurance, leaving those who are less healthy in the remaining risk pool. This situation could further affect risk pools in the nongroup market as individuals with health issues transition from ACA plans to private coverage.

Joel White, president of the Affordable Care Council, indicated that some states have initiated high-risk pool models, which Vice President Vance has supported; however, the ACA largely negates the necessity for such models.

“Risk pools serve to alleviate high costs in the market,” White noted. “Consumers may not perceive any changes since they remain enrolled in an exchange plan. But when significant claims arise, such as $50,000, those costs shift to the high-risk pool, which provides reinsurance for those expensive claims.”

“These pools have, on average, lowered premiums by about 20%,” he added.

Kelly urged consumers to register early and seek help from licensed agents or brokers, who can assist without charge. He remarked that around 71 percent of enrollments in Idaho’s marketplace are facilitated through these professionals.

Despite the tight timeline, Kelly expressed his readiness for any extension of the ACA tax credits, demonstrating his commitment to ensuring Idahoans access the savings they rightfully deserve.