Some Merced-area residents will face steep costs if health insurance subsidies expire

Merced County residents could be among the hardest hit across California if Congress doesn’t renew federal funding that lowers the cost of healthcare on the state’s health insurance marketplace.

The American Rescue Plan increased the amount of financial assistance available to people purchasing their own health insurance coverage on Affordable Care Act marketplaces. If Congress doesn’t approve an extension of the plan, people purchasing health insurance through Covered California could see an average premium increase of 82% — or more than $1,000, according to Health Access California, which focuses on health consumer advocacy.

Covered California enrollees living in Congressional districts 16, 21 and 22 – those of representatives Merced Democrat Jim Costa, Hanford Republican David Valadao and Tulare Republican Connie Conway, respectively – could face even higher premium increases.

People in District 16 could be hit with an average premium increase of 151% — the largest premium increase in the state compared to other districts.

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Congress could vote on the American Rescue Plan extension before breaking for August recess on Aug. 8. The funds are slated to expire by the end of the year if legislators don’t take action before then.

“Central Valley folks might be the most impacted, and yet the delegation may be split on party lines on whether to extend this help,” said Anthony Wright, executive director of Health Access California. “If the help is not extended, you will have some of the biggest premium increases in the Central Valley.”

Lower-income people could see premium hikes

People without employer-provided health insurance turn to the Covered California marketplace to buy health coverage. Federal and state funds help keep Covered California’s rates affordable.

Those buying insurance through Covered California range in professions and ages, and include agricultural, retail and restaurant workers, freelancers, young and older people at the beginning and end of their careers, people between jobs and more. A majority of people enrolled in health insurance through Covered California are Latino, according to Wright.

If Congress doesn’t extend the American Rescue Plan funds, people could pay hundreds if not thousands of dollars more each year for coverage. Lower-income people could be most impacted by the premium increases, meaning those without economic flexibility could be priced out of the marketplace and left uninsured.

More than 64,000 people are enrolled in health insurance through Covered California between Districts 16, 21 and 22. About 67% of them — some 43,000 people — are at or below 250% of the federal poverty line, according to Covered California. That means they make around $34,000 annually.

Data from Covered California shows that Fresno-area residents living below 250% of the federal poverty level are likely to see the largest premium increases — 204% on average across Districts 16, 21 and 22 — while those living at 400% of the poverty level, around $54K annually, are likely to see premium increases of 131%. The population between these federal poverty levels could see a premium increase of 66%.

“Even before the pandemic coverage was important, but the public health emergency certainly underlines the need for people to have coverage, to have access to primary preventive care,” Wright said. “That’s really important in a region like Fresno, where you have higher rates of health issues like asthma.”

California prepares for possibility of subsidies expiring

The American Rescue Plan, which Congress passed last year, stated no one should pay more than 8.5% of their income for coverage, according to Covered California executive director Jessica Altman.

The infusion of funding stemming from the plan helped California “move mountains” and reach a record-high number of people enrolled in health insurance, as well as a record-low uninsured rate of 6%, Altman said.

But, Altman said during an interview with The Fresno Bee, “if the American Rescue Plan expires, 220,000 Californians will be priced out of coverage and unfortunately join the ranks of the uninsured.”

Gov. Gavin Newsom allocated $304 million in the budget to extend health insurance premium assistance under Covered California.

“It’s important to just recognize off the bat that $304 million is an incredibly significant contribution from the state,” Altman said, “but we are receiving $1.7 billion here in California annually because of the American Rescue Plan.”

Wright of Health Access agreed that state funds could help – but not fix – the problem.

“While it could cushion the worst impacts, people would still see increases, premium increases of hundreds or thousands of dollars,” Wright said.

Covered California generally publishes enrollment information in October and open enrollment on the insurance marketplace begins Nov. 1. People have until the end of the year to select or change a health insurance plan.

“Time really is of the essence here, and every day matters in terms of our ability to deliver and really avoid disruption and consumer confusion,” Altman said,