Andrea Deutsch, the mayor of Narberth, Pennsylvania, and owner of a local pet store, doesn’t receive health insurance through her elected position or from her business. Instead, she relies on Pennie, Pennsylvania’s health insurance marketplace, for coverage.
deutsch, who has served as mayor since 2018 and receives a symbolic $1 per year for the role, earns approximately $50,000 annually from her pet store, Spot’s – The Place for Paws, and investments. The 57-year-old, who manages her type 2 diabetes, pays $638.38 monthly for health coverage – half the cost she’d face without the enhanced federal subsidies implemented in 2021 under the biden administration.
However, these extra subsidies are set to expire at the end of 2025. Extending them would cost an estimated $335 billion over the next decade, a measure unlikely to be embraced by the Republican-controlled Congress and the Trump administration as they seek budget cuts to perhaps offset tax reductions.
states contend they lack the financial resources to cover the federal aid. In Pennsylvania, for example, replacing the subsidies would require about $500 million annually, according to Devon Trolley, executive director of the state’s exchange.
“That’s a formidable amount of money, simply insurmountable,” Trolley emphasized.
Without the aid, coverage would become unaffordable for millions, including Deutsch. She admitted that doubling her premium payments would be a important hardship.
“You strive to avoid financial ruin by life’s end,” Deutsch confided. “You need assets to care for yourself as you age and to have some semblance of security.”
The Affordable Care Act,enacted in 2010,included subsidies to assist individuals in purchasing insurance through the marketplaces established under the law. The enhanced subsidies, starting in 2021, expanded assistance to those with lower incomes who already qualified for subsidies, increasing their benefits. Additionally, individuals with higher incomes who previously didn’t qualify received assistance for the first time.
Thanks to these enhanced subsidies, those earning up to 150% of the federal poverty level – about $22,590 for an individual – can get free or nearly free coverage. Households earning more than four times the federal poverty level, previously ineligible for subsidies, now receive some assistance.
This enhanced aid has propelled ACA marketplace enrollment to record levels,reaching over 21 million this year. States that haven’t expanded Medicaid under the ACA, predominantly in the South, have experienced the most dramatic growth in marketplace enrollment since 2020, according to KFF, a health policy research organization. These states include Texas (212%), Mississippi (190%), Georgia (181%), tennessee (177%), and South Carolina (167%).
If the enhanced subsidies vanish, average premium payments would surge by more than 75%, according to KFF. Some individuals,like Deutsch,would face doubled payments.
Given these premium hikes, millions would lose coverage due to affordability, according to the nonpartisan Congressional Budget Office. CBO projects that enrollment would decline from 22.8 million in 2025 to 18.9 million in 2026 and further to 15.4 million in 2030.
edmund Haislmaier,a senior research fellow at the conservative Heritage Foundation,views the expiration of enhanced subsidies as an chance to revamp the ACA. He argues that before the ACA, many self-employed individuals, like small business owners and freelancers, could obtain affordable private insurance. The health care law, he contends, destroyed this market, leaving such individuals with expensive and inferior options.
Haislmaier believes it will take time for the Trump administration to determine its desired ACA changes, which President-Elect Donald Trump tried unsuccessfully to repeal during his first term.”Though, changes can be implemented to preserve access and subsidies for lower-income individuals, the ACA’s primary focus,” he stated.Jared Ortaliza, a research associate at KFF, cautions that letting enhanced subsidies expire could lead to higher premiums for everyone. This is because higher prices might deter healthier individuals from getting insurance, leaving only those with chronic illnesses on the exchanges. As these individuals generally require costlier medical care, overall premiums could increase.”Healthy enrollees may choose to forgo coverage because it’s too expensive,” Ortaliza explained. “If only those with pre-existing conditions enroll, it could further drive up premiums.”
Ortaliza suggests that states could mitigate premium increases through reinsurance programs to offset the cost of their most expensive enrollees or by using state funds to replace expiring federal aid.
However, Hemi Tewarson, executive director of the National Academy for State Health Policy, believes few states possess the financial flexibility to do so.
“Perhaps a couple of states without existing subsidies could add them, but it would be minimal,” Tewarson noted. Discussions between officials from various states are ongoing, but they are largely working under the assumption that they will have to accept a loss of coverage across their populations.
Trolley,head of the Pennsylvania exchange,pointed out that Pennsylvania already contributes its own subsidies to further subsidize marketplace plans. However, its annual expenditure of only $50 million is a tenth of what would be needed to replace the federal aid.
Two-thirds of the 435,000 Pennsylvanians who purchase insurance through the marketplace joined after the enhanced federal subsidies were implemented in 2021. trolley estimates that if they expire, 100,000 or more Pennsylvanians could lose their coverage.
Jessica altman, executive director of California’s exchange, described a similar situation.California receives $1.7 billion annually in enhanced subsidies from the federal government and spends an additional $165 million to keep costs down. California projects that if the subsidies expire, monthly premiums would jump by an average of 63%. More than 150,000 Californians would lose eligibility for federal support, and between 138,000 and 183,000 are estimated to drop their coverage.
How have federal subsidies impacted health coverage costs for individuals in Pennsylvania?
Time.news Interview: Navigating Health Coverage in America
Editor: Good morning, everyone. Today,we have the pleasure of speaking with andrea Deutsch,the mayor of Narberth,Pennsylvania,and the owner of the local pet store,Spot’s – The Place for Paws. Andrea,thank you for joining us. Let’s get right into it. You’ve been mayor since 2018 and earn a symbolic $1 a year. With your income primarily coming from your buisness, how has managing your health insurance been influenced by this unique situational setup?
andrea Deutsch: Good morning, and thank you for having me. It’s definitely an engaging position to be in. as mayor, I don’t receive health insurance through my elected role, nor do I get it from my business. So, I rely solely on Pennie, Pennsylvania’s health insurance marketplace. It’s a critical lifeline for me.
Editor: That’s quite enlightening. I understand that you manage type 2 diabetes, which adds another layer of complexity. Can you share how the recent enhanced federal subsidies have impacted your health coverage?
Andrea Deutsch: Absolutely. Before these subsidies were implemented in 2021, I found health coverage quite expensive. I currently pay about $638.38 monthly for my plan, which is manageable but still a meaningful expense. Without those enhanced federal subsidies, my premiums woudl effectively double, which poses a serious financial hardship for me.
Editor: That’s significant. And it seems like you’re not alone. With the expiration of these subsidies set for the end of 2025, there are concerns about coverage accessibility for millions of Americans.What have you heard about the odds of these subsidies being extended?
Andrea Deutsch: It’s quite concerning. The estimates to extend those subsidies are about $335 billion over a decade—an amount that seems politically unfeasible given the current climate. Local states, including Pennsylvania, face their own struggles with budgets, making it seem insurmountable to support this continued federal aid. As you mentioned earlier, the cost for Pennsylvania alone could reach around $500 million annually.
Editor: It’s a multifaceted issue, to say the least. How do you feel the potential loss of these subsidies will impact people in your community, especially those like yourself who rely on them?
Andrea Deutsch: It would be devastating. Many individuals who previously could afford coverage would find it wholly out of reach. Such as, those earning around $22,590 annually may currently receive free or nearly free coverage. without the assistance,they’ll be left juggling between health needs and financial stability. As I’ve said, “You strive to avoid financial ruin by life’s end,” as it’s all about securing your health and future.
Editor: It sounds like you’re navigating very turbulent waters. In your opinion, what measures can be taken at the state or federal level to improve access to healthcare, particularly for small business owners like yourself?
Andrea Deutsch: It’s crucial that both state and federal governments recognise the importance of affordable healthcare. One avenue could be to simplify and expand access to marketplace enrollments and ensure that more individuals qualify for assistance, irrespective of their income tier. Support for small business owners ensuring they can provide health insurance to their employees would also be beneficial. broader discussions around healthcare policy need to prioritize the wellbeing of everyday Americans.
Editor: Thank you, Andrea. Your insights are vital, especially at this juncture.We appreciate your dedication as a public servant and your openness here today.As we look ahead to 2025 and beyond, let’s hope for a solution that maintains accessibility and affordability in healthcare for all.
Andrea Deutsch: Thank you for having me.It’s been a pleasure to discuss these pressing issues. I hope we can advocate effectively for those who may be voiceless as this conversation continues.
Editor: Thank you for your time, Andrea. And for our listeners, remember that this is an ongoing discussion that affects many facets of our lives. Stay informed and engaged. until next time!