By Jeff Miller
For the past few weeks, Shana Verstegen has been “sick to her stomach” wondering what might happen to her family’s health insurance next year.
Ms Verstegen and her husband both work for a small business as fitness trainers, meaning they have to pay for their own plan.
The Wisconsin parents of two have saved an estimated $800 (£601) a month on their health insurance through Affordable Care Act, also known as Obamacare, premium tax credits.
Set to expire at the end of the year, the federal subsidies are now at the heart of the battle over the US shutdown. Democrats will not back a spending deal that reopens the government unless Republicans renew the subsidies.
Ms Verstegen and others are watching anxiously, wondering what kind of financial consequences they would face if a deal can’t be reached.
“Everything’s getting more expensive now anyway, and this would be another major hit for our family,” she said.
Health policy experts say time is running out to prevent millions from losing their health insurance because the price hikes will make it unaffordable.
The tax credits were first introduced through former President Barack Obama’s Affordable Care Act (ACA) in 2014 and then expanded during the Covid pandemic.
Some Americans could see their monthly cost of insurance – also known as a premium – rise by hundreds of dollars on 1 November, said Leighton Ku, a health policy professor at George Washington’s Milken Institute School of Public Health.
“If you are one of the 20 or so million people who’s getting your health insurance through the marketplace, if you’re about to see prices on average double, that’s a big deal,” he said. “It’s going to be too late real soon.”
Red states would be hardest hit
Of the roughly 24 million people who get their health insurance through the ACA Marketplace, a vast majority benefit from the premium subsidies.
Stacy Cox, a photographer in Utah, has saved over $10,000 a year on average since she started benefiting from the subsidies in 2022.
“It is an absolute lifeline for so many of us,” said Ms Cox, who has an autoimmune disease.
But if the tax credits are not extended, Ms Cox said she will have to quit her newly launched photography business and find a different job that provides health insurance.
Around seven million people like Ms Cox are expected to stop buying health insurance through the marketplace if the tax credits end, Ku said. Of those, around four to five million are expected to lose health care coverage altogether because they won’t be able to find other means, data suggests.
Many of those who will be affected are working-class people who don’t qualify for Medicaid, the government-run programme which provides healthcare insurance for low-income adults, children, pregnant women, elderly adults and people with disabilities.
The hardest hit could be those in 10 US states – most of which vote Republican – that have chosen not to expand eligibility for Medicaid.
“One of the political paradoxes of all this is that the places that get hurt the most are states that are more conservative,” said Ku.
If the subsidies expire and healthier people begin to opt out of insurance, that will also raise premium prices overall for Americans, as a sicker pool of customers will drive up healthcare costs, said Elizabeth Fowler, a distinguished scholar at Johns Hopkins Bloomberg School of Public Health.
“You start to get into a death spiral where premiums become even more expensive and more out of reach for more people,” she said.
Divisions emerge among Republicans
Some Republican leaders in Congress have maintained they will discuss the future of subsidies once the government reopens.
But at least a few Republicans want their party to take action now.
Representative Marjorie Taylor Greene, a close ally of President Donald Trump’s, has said she is in favour of the tax credits, adding that her own children’s premiums would go up if they end.
“I’m absolutely disgusted that health insurance premiums will DOUBLE if the tax credits expire this year,” the Georgia lawmaker said.
Republican Senator Lisa Murkowski this month introduced a bill to extend the credits for two years, while Senators Dan Sullivan and Tommy Tuberville are also in support.
Trump appeared open to negotiating with Democrats over their health care agenda, saying last Monday that if it’s “the right deal, I’d make a deal”. But he seemed to walk back those remarks later.
Experts said Republicans’ opposition to the subsidies is representative of their general dislike of the ACA, also known as Obamacare.
“Some of it has to do with the belief that it’s big government intrusion, and so they resent it for that,” Ku said.
In addition to the expiration of the tax credits, Republicans were also able to target the ACA this year through Trump’s tax and spending bill, which made steep cuts to Medicaid, changes Democrats are also seeking to reverse.
Republicans argue those cuts are aimed at eliminating waste, fraud and abuse of federal funding.
Time ticking to save subsidies
The deeper cuts to Medicaid are not expected to take effect for years but the Democrats who want the healthcare premiums to stay at current levels have to race against a looming deadline – the 1 November open enrollment period.
Some Republicans have argued that the subsidies can be resolved later since they only expire at the end of the year, but Ku said some health insurers have already changed their rates in response to the expiration, and may not be able to change them.
If the subsidies are not renewed before November, people will make their insurance decisions assuming their premiums are set to double, even if the credits are renewed at a later date.
“The mechanics of fixing this problem this late in the game are complicated,” Ku said.
Ms Verstegen said if her rates go up, her family will have to make financial sacrifices. Her family already has a deductible of $14,000, and she is still paying back a major hip surgery from two years ago.
“I truly believe that if this goes away next year, a lot of people are going to be very upset, and that’ll show up in elections,” she said.
Health care affordability was not a top issue in 2024 or other recent elections, as Americans have grown accustomed to accessing health insurance through the ACA.
But if people start to see their insurance prices rise, especially in red districts, that could prove a political liability for the Republican Party, Ku said.
“If I were a representative from Texas or Georgia, I would be feeling some doubts,” he said. “But in a game of chicken, you never want to show your doubts.”
Need assistance in finding affordable Health Insurance?
Contact: Andy Orlikoff
www.AZhealth.us
623-742-3878
In today’s fast-paced world, maintaining financial security is more crucial than ever. One of the most effective ways to safeguard your financial future is by investing in individual insurance. Individual insurance, specifically individual health insurance, provides a safety net that can protect you from the high costs of medical care and unforeseen health issues. This blog explores why individual insurance is essential for financial security and how it can benefit you in the long run.
What is Individual Insurance?
Individual insurance refers to a policy that provides coverage for an individual rather than a group. It typically covers various types of insurance, including health, life, disability, and more. Unlike group insurance, which is often provided through an employer or organization, individual insurance is purchased directly by the policyholder. In this blog, we will focus on individual health insurance and its significance in maintaining financial stability.
Types of Individual Insurance
Individual insurance encompasses several types, each offering different benefits:
- Individual Health Insurance: Covers medical expenses for illnesses, injuries, and preventive care.
- Individual Life Insurance: Provides financial support to beneficiaries in case of the policyholder’s death.
- Individual Disability Insurance: Offers income replacement if you are unable to work due to a disability.
- Individual Long-Term Care Insurance: Covers the cost of long-term care services, such as nursing home or home care.
The Importance of Individual Health Insurance
Protecting Against High Medical Costs
One of the primary reasons individual health insurance is essential is that it helps protect you from high medical costs. Without insurance, a single hospital visit or medical procedure could lead to substantial expenses that may be difficult to manage. Individual health insurance helps mitigate these costs by covering a significant portion of medical bills, including hospital stays, doctor visits, and prescription medications.
Access to Quality Healthcare
Having individual health insurance also ensures you have access to quality healthcare services. Insurance plans often provide access to a network of doctors and specialists, which can enhance the quality of care you receive. This access is particularly valuable when dealing with serious health conditions or when you require specialized medical treatment.
Financial Security and Peace of Mind
Financial security is a crucial aspect of overall well-being, and individual health insurance plays a significant role in this regard. Knowing that you have coverage in place for unexpected medical expenses can provide peace of mind. It reduces the financial stress associated with medical emergencies and allows you to focus on your health and recovery without worrying about the financial implications.
Benefits of Individual Insurance
Customized Coverage
One of the key advantages of individual insurance is that it offers customized coverage tailored to your specific needs. Unlike group insurance plans, which may have limited options and features, individual insurance allows you to select a plan that best fits your health requirements, budget, and personal preferences. This customization ensures that you are adequately protected and that your insurance plan aligns with your unique needs.
Portability and Continuity
Individual insurance is portable, meaning you can retain your coverage even if you change jobs or move to a different location. This continuity is particularly important for maintaining consistent health care and avoiding gaps in coverage. Unlike employer-sponsored group insurance, which may be tied to your job, individual insurance provides stability and ensures that you are continuously protected.
Flexibility and Choice
Individual insurance offers greater flexibility and choice compared to group plans. You can select from various insurance providers, plan options, and coverage levels, allowing you to find a plan that best suits your needs. This flexibility extends to aspects such as deductibles, copayments, and coverage limits, giving you more control over your insurance policy.
How to Choose the Right Individual Insurance Plan
Assess Your Needs
Before selecting an individual insurance plan, it’s important to assess your needs. Consider factors such as your current health status, medical history, and any specific coverage requirements. For instance, if you have a chronic condition or anticipate needing frequent medical care, you’ll want a plan with comprehensive coverage and lower out-of-pocket costs.
Compare Plans
Once you have a clear understanding of your needs, compare different insurance plans to find the one that offers the best value. Evaluate factors such as premiums, deductibles, copayments, and coverage limits. It’s also essential to review the provider network to ensure that your preferred doctors and specialists are included in the plan.
Seek Professional Advice
Navigating the world of individual insurance can be complex, so seeking professional advice from an insurance agent or financial advisor can be beneficial. These experts can help you understand the nuances of different plans, provide recommendations based on your needs, and assist with the enrollment process.
The Role of Individual Insurance in Long-Term Financial Planning
Protecting Your Assets
Individual insurance plays a crucial role in protecting your assets. Medical expenses can quickly deplete your savings and impact your financial stability. By having individual health insurance, you can safeguard your assets and ensure that your savings remain intact for future needs and goals.
Planning for the Unexpected
Life is unpredictable, and unforeseen events can occur at any time. Individual insurance provides a safety net for unexpected events, such as serious illnesses, accidents, or disabilities. Having coverage in place ensures that you are prepared for any situation and helps you manage the financial impact of these events effectively.
Supporting Your Retirement Goals
Individual insurance also supports your long-term financial goals, including retirement planning. By reducing the financial burden of medical expenses, you can allocate more resources toward retirement savings and investments. This strategic approach helps you achieve your retirement goals and enjoy a secure and comfortable future.
Conclusion
Individual insurance is a vital component of financial security. It offers protection against high medical costs, ensures access to quality healthcare, and provides peace of mind. With the benefits of customized coverage, portability, and flexibility, individual insurance is an essential tool for managing financial risk and safeguarding your future. By carefully assessing your needs, comparing plans, and seeking professional advice, you can choose the right individual insurance plan to secure your financial well-being.
Need Affordable Health Plans in Surprise, AZ?
At American Insurance Benefits, we’re passionate about helping individuals and families in Arizona secure the health insurance coverage they need at a price they can afford. Since 2004, Andy Orlikoff and our team have been dedicated to making the process of finding the right plan as simple and stress-free as possible. If you’re looking for expert guidance tailored to your unique needs and budget, don’t hesitate to reach out to us today. Let’s find the perfect health insurance solution together.
