, thousands of Minnesotans will see their health insurance premiums rise.
WASHINGTON — Sara White, a Minnesota restaurant owner, will have her monthly premium for insurance more than double if Congress doesn’t act quickly. This is something she claims she can’t afford.
White, 60, the owner of Tendermade, will not be the only Minnesotan to feel sticker shock as they renew their Affordable Care Act policies through MNsure in the fall.
She is one of 60,000 Minnesotans who received a decrease in their insurance premiums after the American Rescue Plan was approved by Congress as a massive bill to address the COVID-19 crisis. It extended eligibility for the ACA subsidies to those with incomes over 400% of the federal poverty line.
White, one of the higher-income individuals, saw her monthly premium for health insurance drop from over $1,000 per month to $450.
“I was initially shocked by the Affordable Care Act. White stated that it is not affordable.
White’s coverage is very affordable. However, her policy has a $6700 deductible that makes it difficult for her to see a doctor.
White stated that she was unable to pay for her husband’s medical bills. The couple had saved money for their health care, but were unable to cover the costs.
White stated that the premium reduction was “legitimate savings”.
AdvisorNet Financial’s Austin owner Chuck Moline said that Minnesotans were able to keep their premium credits expanding because they are no longer uninsured.
Moline stated, “It was an absolute godsend.”
Moline’s insurance broker firm, Moline Health Insurance Brokers, has an agreement with MNsure to provide assistance for those who are looking to buy coverage through the state’s Affordable Care Act Marketplace.
His firm’s territory, he said, is large and rural in southeastern Minnesota. Many of his clients are also older. These clients, who were under 65 years old, faced huge premiums. They could be paying as high as $2,000 per month. This was before the American Rescue Plan increased the premium subsidies. He claimed that hundreds of his clients received premium reductions.
The expansion of premium credits ensured that people with higher incomes would not have to pay more than 8.5% for their health insurance. Moline stated that he was able save his clients up to $1,200 per month.
Problem is that the premium subsidies for the expanded plan will end at the end.
White and other Minnesotans may be helped by the unexpected agreement reached last month between Senate Majority leader Charles Schumer, West Virginia Democratic Senator Joe Manchin. Manchin had for months refused to support a broad-ranging energy and health bill.
The Inflation Reduction Act is a new bill that would allow the government to extend subsidies for an additional three years at $64 billion.
Schumer will use budget reconciliation, which prohibits the use of filibuster to move the act. However, approval of the legislation – either in the U.S. Senate nor U.S. House – is not guaranteed. It is likely that all Senate Republicans and House Republicans will vote against the legislation.
If Schumer can lock up the U.S. Senate with Vice President Kamala Harris as the tie-breaker then a vote could be held in that chamber on the package as soon as next week.
The massive Inflation Reduction Act will not only extend ACA’s subsidy expansion, but it will also allow Medicare to negotiate certain drug price and limit seniors’ drug costs under Medicare to $2,000 annually.
The package would also invest approximately $385 billion in combating climate change. It would also boost U.S. energy production by providing incentives to a wide variety of industries to reduce carbon emissions.
Older Minnesotans, clinics most affected
The expansion of the ACA subsidies reduced the premiums of approximately 59,500 Minnesotans. MNsure reported that 10,500 were white middle-income individuals who would lose all financial assistance if Congress does not extend the program.
Allen Zutz, a Bemidji-based health insurance broker, stated that the subsidies were beneficial for people between the ages 55 and 64 who are either retired or don’t have jobs that offer health insurance. MNsure estimates that 32,000 people will lose their subsidies.
Zutz stated that twenty percent of Zutz’s clients (or around 80 households) were receiving assistance through the subsidies.
Premium assistance was expanded to ensure that low-income Americans did not have to pay premiums. This contributed to an unprecedented 14.5 million sign ups on the exchanges in 2022.
Rochelle Westlund (director of public policy, Minnesota Association of Community Health Centers) stated that if the subsidies are removed, a lot of stress will be placed on Minnesota’s health care centers.
MNACHC has 17 Minnesota member clinics, and approximately 80 sites in the state that provide services to a total population of 200,000 people. The majority of patients are covered by Medicaid. However, the subsidy change would affect around 10 to 15% of them.
Members clinics do not refuse patients who cannot afford to pay. Without the subsidies, health centers would have to bear the additional loss of patients.
Westlund stated that if the health subsidies are removed, those on the individual market could lose or be unable to afford their insurance. “If people can’t afford to visit a clinic, the health centers will offer care on a sliding-fee basis to allow them to access care. This would put additional pressure on clinics.