Pennie users warned about ‘sticker shock’

Those who get insurance through the exchange could see monthly premiums rise by 300%.

By JACK TROY
TribLive

The Health Insurance Marketplace is set to get more expensive for most Pennsylvanians who rely on it.

Monthly premiums could rise by 300% for some residents who use the state’s Affordable Care Act (ACA) health insurance exchange, Pennie, to secure coverage. The average enrollee faces a possible 82% increase.

All told, about 450,000 of Pennie’s record 500,000 users are staring down pricier premiums.

Pennie expects the increases to drive away about 150,000 of those people.

“There’s going to be that sticker shock, and some people will have walked,” said Pennie’s executive director, Devon Trolley.

That is, if Congress allows the enhanced premium tax credit, a Biden-era expansion of existing subsidies for the ACA, to expire at year’s end.

Pennie, insurers and health care access advocates are acutely aware the clock is ticking.

Some among them view the upcoming federal funding bill, due at the end of September, as the only realistic shot of preserving the more robust subsidy.

“We really see that as the last date to extend these in order to keep affordable coverage in place because open enrollment starts Nov. 1,” Trolley said.

A warning

With an extension uncertain, Pennie began warning consumers who could lose part or all of their subsidy in a series of letters last month.

Republican lawmakers are divided on the issue, even as a June poll from health policy nonprofit KFF shows 77% of the public wants the enhanced credit to stay.

U.S. Rep. Brian Fitzpatrick, R-Bucks County, and others in his party have shown support for an extension.

Some Republicans in Congress have bristled at the price. Another decade of the program would cost $383 billion, according to the nonpartisan Congressional Budget Office.

U.S. Rep. John Joyce, R-Altoona, who is Pennsylvania’s only representative on the House subcommittee on health, did not respond to a request for comment.

The split could set the stage for cooperation with Democrats, who widely support an extension.

Shana Jalbert, director of communications and development for the Pennsylvania Health Access Network, isn’t holding her breath.

“I don’t think we’re incredibly optimistic that Congress is going to renew this,” Jalbert said.

The costs of letting it expire would exceed any savings, according to Trolley. When people can’t afford health insurance, she said, they’re more likely to delay seeing a doctor until they need more serious — and costly — care.

“We’re not saving anything here,” Trolley said. “The costs are actually higher the longer people wait to treat conditions.” How does the credit work?

The enhanced premium tax credit was established in the 2021 American Rescue Plan act to help more people purchase health insurance and access care during the pandemic. The Inflation Reduction Act of 2022 extended the program through 2025.

It built off a subsidy baked into the 2010 Affordable Care Act, which eased the cost of coverage for anyone making between roughly $15,000 and $60,000 a year. Eligible applicants can use the credit to lower premiums up front or claim the tax break when filing their return.

The enhanced version raised subsidies within that income range. For anyone making more than that, their premiums were capped at 8.5% of their earnings.

More generous financial assistance has driven ACA enrollment to record numbers, both in Pennsylvania, with its 500,000 enrollees, and among the 24 million who used the Affordable Care Act marketplace in 2024.

The enhanced credit also has allowed more consumers to purchase better health plans. The marketplace divides plans into four categories: bronze, silver, gold and platinum. Cheaper plans offer lower premiums but higher deductibles, and vice versa for more expensive ones.

Since 2021, Pennie has seen more people shift from bronze to silver or silver to gold, according to Trolley. Platinum plans were only recently introduced to Pennsylvania’s exchange.

To obtain subsidies, consumers have to submit proof of income to their state’s health insurance exchange.

The exchanges are available only to people who are in the country lawfully and whose other insurance options are considered unaffordable or inadequate. Medicare and Medicaid recipients are not eligible.

The spending bill signed by President Donald Trump in July will force ACA beneficiaries to update their income information, immigration status and other details every year or risk losing coverage. It will also shorten open enrollment by a month.

What if the credit isn’t extended?

Nearly all Pennie users would be impacted by the credit reverting to its lesser form, Trolley said.

About 10%, or 50,000, would lose the credit entirely. And 80%, or 400,000, would see their credit reduced.

Enrollees can calculate their estimated 2026 monthly payments on the Pennie website.

Many ACA recipients have few other realistic options for insurance, like lower-income people who make too much money for Medicaid or retirees waiting to turn 65 and get onto Medicare.

Along with those who just miss the cutoffs for other federal health insurance programs, many Pennie users are gig workers, small business owners or working for a company that doesn’t provide group coverage.

“Many of the people who are on marketplace insurance are not wealthy,” Jalbert said.

Among the roughly 150,000 Pennsylvanians who expect to forgo ACA without the enhanced credit, many of them will be people who don’t need much health care, experts say. That will leave the pool of beneficiaries older and sicker.

In turn, insurance rates will likely climb. Insurers selling coverage on Pennie have proposed an average premium increase of 19% for customers who buy their own insurance and 13% for small businesses.

The subsidy’s expiration is one justification from insurers for proposing higher rates. The Pennsylvania Insurance Commission is reviewing these drafts rates and will adjust them, if necessary.

Highmark spokesman David Golebiewski offered support for the program, saying nearly 200,000 of the insurer’s members have used the enhanced credit to lower their monthly out-of-pocket costs.

“Extending these enhanced tax credits would help individuals and families find and maintain quality, affordable health insurance if they do not receive coverage through work or another government program,” Golebiewski said.

A UPMC spokesperson also backed the enhanced credits as helping more consumers access affordable health insurance.

If Congress fails to act by mid-fall, Pennie will start sending enrollees personalized information about how their monthly premiums could rise, Trolley said.

Will the state step in?

State legislators have prepared for this scenario.

In 2024, they granted Pennie the authority to establish an affordability program to provide premium assistance to eligible residents. The exchange commission is empowered to determine the degree of financial assistance, though the income of recipients is limited to about $45,000.

Just one problem: There’s no funding source. For now, the program exists only on paper, and there’s little sign legislators are going to change that in this year’s budget talks.

Neither the House nor Senate budget bills would fund the program.

Even if it did get money, the law allows the state to funnel only $50 million into the program a year. Pennsylvanians receive an estimated $600 million in enhanced premium tax credits.

“Our funding mechanism is designed to provide some support but not backfill an entirely gutted program,” said state Rep. Dan Frankel, D-Squirrel Hill, who chairs his House committee on health. “It’s hard to see how we could really step in and make it seamless for people.”