As open enrollment begins in WA, future of health insurance tax credits remains murky

Starting Saturday, Washingtonians who need to buy health insurance through the state’s online marketplace can enroll in or change their plans.

The beginning of open enrollment comes as the federal government shutdown continues amid disagreements in Congress about the future of federal subsidies for these health insurance policies, which are available under the Affordable Care Act.

These tax credits are set to expire at the end of the year without an extension from Congress. Democrats have refused to vote to end the shutdown without Republicans agreeing to extend the subsidies.

Premiums for individual insurance bought on the Washington Health Benefit Exchange are rising an average of 21%, due in part to the loss of these enhanced tax credits, which started during the COVID pandemic. This increase is in line with similar hikes nationwide. The average growth rate last year was 10.7% in Washington.

The state Office of the Insurance Commissioner estimates the increase this year would be 6% or 7% less if the tax credits continued.

Though at this point, it’s unclear how ​​Congress deciding to extend the tax credits would affect premiums now that open enrollment is beginning.

The Washington exchange’s CEO, Ingrid Ulrey, said last week that if Congress takes action, “we are committed to delivering that relief to our customers as quickly as possible.”

Nearly 300,000 Washington residents buy insurance on the exchange. About three-quarters of them qualified for the federal tax credits, helping them decrease annual premiums by an average of $1,330. For seniors, those savings jump to more than $1,900 annually.

The exchange is used by people who do not have access to health insurance through their jobs or from government programs, like Medicaid.

In some parts of Washington, enrollees who benefit from the tax credits could see their premiums double without them. The hardest-hit spots are in rural areas of eastern Washington, according to a report from U.S. Sen. Maria Cantwell, D-Wash.

State officials expect 80,000 people to now forgo health insurance if the credits aren’t extended. Washington’s uninsured rate has been improving for years, to 4.8% in 2023. Officials worry the end of the subsidies will cause the state to backslide on that progress.

“That means higher costs and strains on our health care system as people put off preventative care,” state Insurance Commissioner Patty Kuderer said Thursday. “These effects will be felt by people across the state, but will hurt some of our rural communities the hardest.”

Those who choose to go without insurance are more likely to be healthy, likely fueling further premium hikes for those who remain insured, as the insurance pool would be less healthy overall and more risky for insurers.

The state still offers options for financial help, including Cascade Care Savings for people who make up to 250% of the federal poverty line. The premium assistance program, launched in 2023, helps nearly 100,000 residents.

Washington’s exchange is seeking $130 million per year in state funding for Cascade Care Savings to mitigate the loss of the federal tax credits. This would require legislative approval.

Open enrollment will run through Jan. 15. To begin coverage by Jan. 1, enrollees should sign up by Dec. 15. Those who apply later will have their plans begin Feb. 1. Existing customers will be automatically renewed, but can still shop around and compare plans.

Enrollees have been able to browse their options and prices since last week.