Ahead of a possible government shutdown, congressional Democrats have pushed for a stopgap government funding deal that includes an extension of the Affordable Care Act’s (ACA) enhanced premium tax credits, which are scheduled to expire at the end of this year. With open enrollment rapidly approaching (beginning November 1 in most states), the issue is likely to remain a top priority for Democrats and an area of concern for a small but growing number of congressional Republicans.
What about this policy issue could bring the two sides to the negotiating table? The answer concerns the broad group of individuals who would see their health costs rise without the enhanced tax credits. Millions of people who purchase their own health insurance coverage could see their monthly costs double or more when they log on to Healthcare.gov in November. And it’s likely these big premium increases could disproportionally hit people in southern red states, small business owners and employees, farmers and ranchers, older adults, and rural Americans.
In other words, some key Republican constituencies could be hit hard by rising health costs in the leadup to the midterm elections.
People who buy their own health insurance often do so because they work jobs that don’t offer health benefits. More than a quarter of farmers, ranchers, and agricultural managers had individual market health insurance coverage (the vast majority of which is purchased with a tax credit through the ACA Marketplaces). About half (48%) of working age adults with individual market coverage are either employed by a small business with fewer than 25 workers, self-employed entrepreneurs, or small business owners. Middle-income people who would lose tax credits altogether are disproportionately early and pre-retirees, small business owners, and rural residents.
And while the ACA Marketplaces have doubled in size nationally since these enhanced tax credits became available, more than half of that growth is concentrated in Texas, Florida, Georgia, and North Carolina.
More than 24 million people who purchase their own health insurance could soon see their costs go up significantly, but it’s not yet clear who they will blame. KFF polling from earlier this summer found that many Marketplace shoppers were unaware of this financial help expiring. The coming weeks will be pivotal for both parties to either come to a compromise – or try to shape the narrative around rapidly rising ACA premium payments.