WASHINGTON — During the last few months of the year, Virginia Hutchinson is trying to get in as many medical appointments as she can before her insurance premiums are expected to rise next year.
As an administrative assistant at a small, family owned business in Birmingham, the Affordable Care Act marketplace allows Hutchinson to have health insurance she wouldn’t have been able to receive otherwise. She also benefits from the enhanced premium tax credits, which save her nearly $300 per month.
“I couldn’t afford my current policy without the tax credit,” Hutchinson told Alabama Daily News. “So if the tax credit goes away and the premium increases, I mean, that would be hundreds of dollars more a month.”
Hutchinson opted for a gold plan because of her medical needs. She currently pays a little over $380 a month for a plan that would cost her about $656 without the credits. So now, she’s grappling with the possibility of being unable to afford as comprehensive a plan next year because the enhanced tax credits, put in place under the American Rescue Plan in 2021, are set to expire at the end of 2025 unless Congress acts.
“What everyone’s been asking is, ‘What are you going to do next year with health care?’” Hutchinson said. “And I’m like, ‘Well, I don’t know.”’
And she’s not alone. More than 400,000 Alabamians receive health coverage through the ACA marketplace. Since the enhanced subsidies were enacted, more than 250,000 people in Alabama have added coverage, according to Blue Cross and Blue Shield of Alabama.
“If these tax credits go away, families lose coverage, hospitals lose revenue, and premiums go up for everybody else,” Debbie Smith, campaign director for Cover Alabama at Alabama Arise, told ADN. “The insurance companies are hiking prices for everyone, not just those who get Marketplace coverage.”
In Alabama, some ACA marketplace premiums could increase by about 93% if the enhanced subsidies expire, according to the Kaiser Family Foundation. That could lead to an estimated 130,000 Alabamians losing coverage, Smith said.
Health insurers are expected to increase rates for individual marketplace plans by about 20% next year. That increase, combined with the loss of enhanced subsidies, could be a real sticker shock for Alabamians come mid-October when notices go out on the cost of premiums for 2026. Open enrollment begins in November.
“That’s our real concern, is that the price shock is going to just drop people off health coverage altogether, or just make it unaffordable for people to be able to keep up with their health insurance,” Smith said.
In Alabama, the estimated average out-of-pocket premium increase due to the loss of the enhanced tax credits is $50 per member or $80 per member for BCBSAL, according to the insurer.
Blue Cross and Blue Shield of Alabama said it “remains firmly committed to supporting the extension of enhanced ACA premium tax credits” to ensure Alabamians have access to healthcare.
Addressing the tax credits is at the crux of a looming government shutdown as Republicans and Democrats remain far apart on how to fund the government beginning Wednesday.
Democrats, including Alabama Reps. Shomari Figures and Terri Sewell, are urging Congress to extend the subsidies as part of a funding deal. But GOP lawmakers remain steadfast that their seven-week temporary funding bill should remain “clean” and keep spending levels flat while they work on full-year spending bills.
“It’s not just a matter of wanting to see it,” Figures, D-Mobile, told ADN last week. “It’s something that we absolutely need in the state.”
Alabama congressional Republicans aren’t eager to extend the subsidies as part of the stopgap bill and remain noncommittal about addressing them later this year. Rep. Barry Moore, R-Enterprise, said he was “concerned” about extending them. Sen. Tommy Tuberville said he has “mixed feelings” about the credits but didn’t want to see them included in the Republican-led continuing resolution.
Extending the enhanced subsidies could increase the deficit by $350 billion over 10 years, according to the Congressional Budget Office.
Senate Majority Leader John Thune told CNN recently he was “happy to have the conversation” about extending the credits after the funding deadline. The Senate returns from a weeklong recess Monday, one day before the shutdown deadline.
As lawmakers prepare to return to Washington, Hutchinson said she has a message for them as they consider health care priorities.
“I think Alabama is built of working-class people, and that there’s a lot of people whose lives depend on having affordable health care,” she said. “And if you represent our state then you need to represent us and you need to be fighting for us to get our basic needs met…and that includes having affordable health care, whether or not your employer offers health care.”
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