Copyright The Oregonian
Oregonians who buy health insurance through the Affordable Care Act marketplace, often called Obamacare, are facing the likelihood of much higher costs next year, with no clear fix in sight. A federal spending package expected to end the nation’s longest government shutdown leaves out a solution for the expiring enhanced premium tax credits that have helped millions of Americans, including thousands in Oregon, afford their health insurance. Instead, the deal only promises a vote in December on whether to renew those pandemic-era tax credits, which are set to expire at the end of the year without any congressional action. The stopgap funding bill still needs to get approval from House lawmakers, and a vote is expected Wednesday night. That uncertainty comes as open enrollment for 2026 Obamacare coverage is already underway. In Oregon, sign-ups opened Nov. 1 and run through Dec. 15 for plans that start in January. Residents can continue enrolling until Jan. 15 for coverage that begins in February. As the shutdown deal advances, here’s what its passage could mean for the enhanced Obamacare subsidies — and for the Oregonians who rely on them to keep their coverage affordable. What’s happening with ACA subsidies? When the Affordable Care Act became law in 2010, one of its major goals was to provide health insurance options for people who don’t get coverage through work or a government program. The law created health insurance marketplace plans and offered income-based subsidies to cap how much enrollees paid for a typical plan. Originally, only households earning between 100% and 400% of the federal poverty level were eligible for premium tax credits under the Affordable Care Act. But during the pandemic, Congress temporarily boosted the subsidies through the American Rescue Plan, later extending it in the Inflation Reduction Act. Those changes meant that people with lower incomes could get a standard plan with no monthly premium, and no one had to pay more than 8.5% of their income for it — even those with higher incomes. But these expanded subsidies were never permanent. Unless Congress acts, they’ll expire at the end of the year, shrinking financial aid to pre-2021 levels. If these enhanced subsidies were to continue, the Congressional Budget Office estimates it would increase the national deficit by $23 billion next year and roughly $350 billion over the next decade. Who in Oregon will feel the change — and where? Most Oregonians won’t notice a difference. The majority of residents get coverage through work or the Oregon Health Plan, the state’s Medicaid program that covers about a third of the population, and don’t rely on federal subsidies. The impact will fall on roughly 140,000 Oregonians, or about 3% of the state’s population, who buy their own insurance through the Affordable Care Act marketplace. Of those, about 111,500 received subsidies this year to help pay premiums, according to state and federal data. The effect won’t be felt evenly across the state. Marketplace data from the Centers for Medicare & Medicaid Services shows that rural counties have the highest share of residents relying on subsidies, even though their total enrollment numbers are smaller. In Malheur, Baker, Morrow, Grant, Harney and Umatilla counties, more than 90% of marketplace enrollees received financial assistance this year. Another group that would be hit hardest are the 35,000 Oregonians who make more than 400% of the federal poverty level — roughly $84,600 for a couple or $128,600 for a family of four. Without the enhanced subsidies, these households would lose all federal financial help and would be responsible for paying the full sticker price of their Obamacare plans. Counties with the largest share of higher-income ACA enrollees include Hood River, Deschutes and Benton counties, where roughly a third of marketplace participants earn too much to qualify for assistance under the original ACA rules. How much will ACA insurance costs rise for Oregonians? If the current legislative package passes and Congress fails to renew the pandemic-era enhanced subsidies, Obamacare enrollees will still qualify for help — but far less of it. Insurers in Oregon have already priced those changes into their 2026 rates. Plans on Oregon’s individual market will rise about 10% on average next year, according to the Oregon Department of Consumer and Business Services. Nationally, insurers expect steeper hikes — about 26% on average, according to an analysis by the health care research nonprofit KFF. But experts say the true impact will come from the loss of subsidies, not the rate filings themselves. The Oregon Health Authority estimates marketplace enrollees could pay $127 to $456 more each month, depending on income. “The 10% average premium increase in Oregon is what insurers are charging, not what consumers will pay,” said Rajiv Sharma, a health economist at Portland State University. “When the enhanced tax credits go away, some Oregonians will see far, far bigger jumps.” Under the current enhanced subsidies, anyone earning more than four times the federal poverty level — $62,600 for a single or $128,600 for a family of four — pays no more than 8.5% of their income for premiums. If Congress does nothing, that cap disappears starting Jan. 1. Those people would be billed the full cost of their plans, which in some cases could more than double their monthly premiums. For example, the monthly cost of a standard health plan covering a 50-year-old Portland couple would be $1,423, as opposed to $850 a month with the expanded subsidies. Sharma said the biggest dollar increases will hit middle- to upper-middle income Oregonians, particularly those nearing retirement age. He said insurers often charge higher prices to older customers than younger ones, so changes in federal subsidies can translate into much larger bills for people in their 50s and early 60s. Lower-income families could also feel a noticeable squeeze, Sharma said, since even modest premium hikes would eat into tight household budgets. The lowest-income Oregonians, however, are largely shielded from the change. Those earning up to 138% of the federal poverty level — about $21,000 a year for one person or $43,000 for a family of four — qualify for the Oregon Health Plan, the state’s Medicaid program. Oregon also recently launched the OHP Bridge Plan, which provides Medicaid-like coverage for adults making up to 200% of the poverty level, or roughly $30,000 for an individual or $62,400 for a family of four. Roughly 32,000 people are currently enrolled in that plan. But for those just above that cutoff, the end of enhanced subsidies will mean losing access to free or very low-cost insurance. Wendi Worthington, a 55-year-old Bend resident, said numbers are more than policy. She left her job as a public educator to care for her husband, a former high school teacher who she said suffered a stroke and was later diagnosed with a rare brain cancer. Worthington said the family currently relies on her husband’s $7,000 monthly disability income, which places them over the Medicaid income limit but still struggling with medical bills. Because her husband is under 65, he doesn’t qualify for Medicare, which would only cover him — not her or their children. Worthington said her family pays $1,400 a month for their insurance with subsidies. Without them, she said, their premium would soar to $3,284 — roughly $40,000 a year, nearly half their income. “That keeps me up at night,” Worthington said. “Health insurance shouldn’t take 50% of an income, and that’s just the insurance. That doesn’t include out-of-pocket costs for health care.” She worries families like hers — middle-income, living with a disability or illness and unable to work — will be thrown into crisis. “This could happen to anyone. We thought we’d work until 65. Then a stroke and cancer diagnosis changed everything,” she said. “When they talk about people opting out of insurance, that’s not an option for us. It’s life or death.” Why does this matter for Oregon’s ACA marketplace? Rising insurance premiums affect more than just individual households. They can influence the broader health care system as well. Sharma said that when premiums rise, younger and healthier people are more likely to drop coverage. That leaves insurers with a customer base that skews smaller, older and sicker — and to cover those needing more care, companies tend to increase prices further, he said. That cycle — a health insurance “death spiral,” as economists call it — can push insurers to shrink networks, leave counties or pull out of the marketplace entirely, Sharma said. He said that risk is especially higher in rural areas, where populations are smaller and fewer insurers operate. Fewer insured people can also mean more uncompensated care. Hospitals and clinics must absorb unpaid bills, which often leads to higher costs for everyone else. “Health care is provided where it is funded,” Sharma said. That means rural communities could feel the impact twice — fewer insurance options and financially strained hospitals, he said. Can Oregon do anything to provide some relief? If Congress doesn’t extend the expanded subsidies, Oregon won’t have much power to soften the blow. Amy Coven, spokesperson for the Oregon Health Insurance Marketplace, said the state considered options like a state-funded subsidy or a federal waiver, but none are workable under the current system. That’s because Oregon relies on HealthCare.gov, the federal enrollment system, which the state cannot modify or use to distribute its own state-funded aid, Coven said. She said that allocating money to provide relief would also require legislative approval during the 2026 session. But Coven said that’s “very unlikely,” given the state’s tight budget and competing needs for Medicaid, which also faces funding cuts. There are also technical barriers. Because Oregon doesn’t control HealthCare.gov or have direct access to its consumer data, it can’t easily identify who would qualify for help or deliver payments quickly. “Even if the funds for a relief stopgap were to unexpectedly become available, Oregon does not currently have a way to efficiently identify who exactly those people are or connect them to those funds,” Coven said. There also wouldn’t be enough time to build that infrastructure before the end of the year, she said. What can Oregonians do now? Oregonians shopping for Obamacare plans for next year still have ways to manage rising costs. During open enrollment, they can compare plans and, if needed, switch to one with lower premiums — such as moving from a silver to a bronze plan, which typically has cheaper monthly costs but higher deductibles. For coverage starting Jan. 1, the first month’s premium is typically due in mid-December. State officials say that consumers should pay their first premium on time to avoid losing coverage, even if Congress is still deciding whether to renew the enhanced subsidies. If Congress passes a late extension, Coven said HealthCare.gov will automatically update subsidy amounts and send the new information to insurers. Billing adjustments might take a short time to show up, Coven said, but federal grace-period rules would give consumers enough time to pay for their January coverage without losing it.
