Mississippi could suffer the most if health insurance subsidies lapse

[December 05, 2024]  By GWEN DILWORTH/Mississippi Today

A new report warns Mississippi could see the steepest drop off in health insurance coverage if Congress doesn’t vote to extend temporary health coverage subsidies at the end of next year.

Over 100,000 Mississippians would lose health insurance – a 43% increase in the state’s already-high uninsured rate – the policy think tank The Urban Institute predicted last month.

“If the enhanced premium tax credits expire, there will be dramatic declines in Marketplace coverage and increases in uninsurance, but the effects will not be felt equally across states or by race, income, and age,” said Jessica Banthin, senior fellow at the Urban Institute in a statement. “Our analysis shows that their expiration could mean some communities may experience greater coverage losses, making healthcare unaffordable and inaccessible.”

The increased subsidies allow Americans to buy health insurance plans on the Affordable Care Act Marketplace at lower costs with enhanced premium tax credits. The benefits were first authorized by Congress in 2021 to help more Americans attain health care coverage during the COVID-19 pandemic.

They also allowed more Americans than before to access the premium tax credits by raising the income ceiling for eligibility and allowed low-income households to access insurance without paying premiums.

The benefits, which have led to a record high of 21.3 million people insured through the Marketplace nationwide, will expire in December 2025 without a renewal from Congress.

“If (the premium tax credits) go away next year, I’m afraid it will reset us to where we were five years ago, with the Marketplace policies basically becoming catastrophic plans again,” State Health Office Dr. Daniel Edney told Mississippi Today.

Catastrophic plans are designed to cover major medical emergencies but not routine medical care.

Premium payments are expected to increase by over 75% on average if the tax credits expire.

For a 40-year-old living alone in Jackson and making $30,000 annually, the cost of monthly premiums for a silver health insurance plan would rise $93 a month, from $49 to $143, according to KFF.

The Marketplace is a federally or state-operated health insurance exchange where people can shop for and enroll in coverage and access financial assistance based on their income.

The enhanced tax credits have contributed to a significant increase in health care coverage in Mississippi since 2021.

In 2020, 12.9% of Mississippians were uninsured, compared to 10.5% in 2023.

“It’s been a gamechanger,” said Edney.

Health care coverage through the Marketplace in Mississippi has nearly doubled since the benefits were passed, representing the second highest percent increase in the nation behind Texas.

Mississippi remains one of 10 states in the nation not to expand Medicaid coverage, making it more reliant on the Marketplace for affordable health care coverage. Marketplace enrollment rates since 2020 have grown fastest in states with high uninsured rates that have also not expanded Medicaid.

The Urban Institute’s data tool predicts that if the enhanced tax credits are not renewed, 143,000 Mississippians would lose coverage under subsidized Marketplace plans.

Some would have the option to enroll in employer-sponsored coverage or be able to afford health insurance without the additional benefits. But most are forecasted to lose coverage entirely.

Mississippi currently uses the federal exchange, but the Legislature passed a law authorizing the creation of a state-based Marketplace earlier this year, which could incentivize health insurance companies to offer policies at lower costs. But federal officials will not approve Mississippi implementing its own exchange because Gov. Tate Reeves has not yet provided a letter of approval.

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