WASHINGTON — Unless Congress steps in with a solution, thousands of Alaskans will lose health insurance subsidies at the end of December and see the cost of their premiums shoot up.
For a dramatic example of what will happen, consider an Alaska couple in their 60s who earn about $53,000 a year each.
They now pay less than 9% of their income to get two silver-level plans. If their subsidies go away, they’d spend almost 50% of their income to keep those insurance plans.
That’s an impossible increase, said Sen. Lisa Murkowski.
“Now, you tell me, who out there can find an additional half of their income to go towards insurance?” she asked.
This fictitious middle-aged, middle-income couple are a subset of the roughly 25,000 Alaskans who buy subsidized insurance plans. They are small-business owners and their employees, fishermen or people who work for non-profits — really, anybody who earns modest pay and does not have employer-sponsored insurance.
The imaginary couple, and a few thousand Alaskans like them, would be affected the most if what’s known as “enhanced premium tax credits” expire at the end of the year. But nearly every Alaskan who buys insurance on the marketplace would see their payments rise, too. Ultimately, it strains the health care system everyone relies on, especially so in Alaska, where health insurance rates are among the highest in the nation.
Murkowski isn’t the only person in Congress to notice. The expiring subsidies are at the heart of the budget standoff that has the government teetering on the edge of a shutdown.
Murkowski thinks the list of Democratic demands to avoid a shut down goes too far, but she agrees with them that the enhanced premium tax credits shouldn’t expire this year.
“As we look to how we keep the government open, let's also figure out how we avoid this looming crisis with the cost of insurance,” she said.
The enhanced tax credits were adopted during the COVID pandemic. They increased the original Affordable Care Act subsidies, and for the first time, extended them to people who earned more than the initial group, such as the fictitious 60-year-olds in our example.
If the enhanced credits disappear, leaving only the classic ACA subsidies, the Alaska Division of Insurance calculates on average, subsidized consumers would have to pay more than double what they pay now.
“Doubling and tripling of premiums is substantial. I think it's fair to say we can expect to lose quite a few Alaskans in terms of having insurance coverage,” said Alaska Hospital & Healthcare Association President Jared Kosin.
He predicts some people will stop buying insurance, then stop getting routine care at clinics and doctors’ offices.
“They have nowhere else to go, and so that starts to put more pressure on emergency rooms,” he said. “It puts more pressure on hospitals, because that care will be completely unpaid for.”
State Rep. Genevieve Mina, D-Anchorage, foresees cascading effects, just when a number of poorer Alaskans are losing coverage from Medicaid.
“And we all know that uninsured people increases uncompensated care, which increases costs for everybody else,” she said.
The Alaska Legislature passed a resolution this spring calling on Alaska’s congressional delegation to press for an extension of the tax credits.
U.S. Sen. Dan Sullivan did not grant an interview request. A spokeswoman said by email that he’s talking to colleagues and the Trump administration to try to prevent the expiration of the subsidies.
Congressman Nick Begich’s office did not grant an interview request nor provide a statement.
