By TIM SHEEHAN

Central Valley Journalism Collaborative

Almost 185,000 lower-income San Joaquin Valley residents – and nearly 2 million statewide – who purchase health insurance through Covered California will see their monthly premiums skyrocket in January after Congress failed to reach agreement on extending “enhanced tax credits” that subsidize a large share of the cost.

The result is that thousands of families likely won’t be able to afford health coverage and will join the ranks of the uninsured, said Jessica Altman, Covered California’s executive director.

“In a time when costs are rising in so many places and many people are fighting to just meet their daily needs, this is a huge stressor for people and the families that we serve,” Altman told the Central Valley Journalism Collaborative in a recent interview.

Covered California is the state’s insurance marketplace under the federal Affordable Care Act (also known as Obamacare).

The expiration of the tax credits, if they are not extended by Congress, would increase insurance premiums for subsidized Covered California enrollees by more than double in most of the Valley’s counties, and nearly quadruple in Merced County.

Sept. 30 was an important milestone for Congress to act to extend the tax credits upon which enrollees in Covered California depend to offset a portion of their healthcare costs. Typically, Covered California sends out renewal notices on or about Oct. 1 to notify enrollees of premiums for the coming year, with open enrollment beginning Nov. 1. But with no action to extend the credit, Altman said, the agency will delay sending the renewal notices until Oct. 15.

“I have hope, but I don’t have confidence” that Republicans and Democrats will break their deadlock over extending the enhanced tax credit, Altman said. The tax credit was a key partisan sticking point contributing to the Oct. 1 shutdown of the federal government.

Covered California projects that its subsidized enrollees in Valley counties would experience large increases in their monthly health insurance premiums if the enhanced tax credits expire:

Fresno County: Average increase of 160 percent.

Kern County: Average increase of 160 percent.

Kings County: Average increase of 147 percent.

Madera County: Average increase of 139 percent.

Merced County: Average increase of 388 percent.

San Joaquin County: Average increase of 129 percent.

Stanislaus County: Average increase of 112 percent.

Tulare County: Average increase of 140 percent.

Premiums for health plans sold by insurance carriers through Covered California were already projected to increase by an average of 10.3 percent – the result of higher costs for health care and prescription drugs, and other industry factors. That increase does not account for the expiration of the enhanced premium tax credit.

In San Joaquin Valley counties, about 202,000 people were enrolled as members of Covered California as of July. Of those, about 91 percent have their costs at least partially subsidized by tax credits.

Altman said that under the original Affordable Care Act, tax credits or subsidies were available to people whose income put them just over the threshold for Medicaid eligibility – about $22,000 per year for an individual.

“Enhanced” tax credits – a higher level of subsidy – were introduced in 2021 as part of COVID relief legislation. That expanded the eligibility for the tax credits to people and households with incomes above 400 percent of the federal poverty limit, or about $65,000 for an individual, Altman said. It also capped out-of-pocket costs for premiums at 8.5 percent of household income.

It’s that expanded range of people for whom the tax credits are set to expire at the end of this year.

“We have a record of just under 2 million enrollees” in Covered California, Altman said. “You have one set of people who are going to see higher costs because they will get less tax credit than they would have otherwise when they go back to the ACA.”

An estimated 400,000 enrollees statewide “are going to lose their tax credits altogether because they’re above that $65,000 level,” Altman added. “Those people are where we’ll see even people having to pay … an average increase of over $500 a month in coverage for that group of people as they lose their tax credits.”

Many of those people could become uninsured, earning too much to qualify for Medi-Cal, the state’s version of the Medicaid insurance program for low-income residents.

KFF, a nonprofit health policy, polling and news organization, reported in September that those residents or households in which income is more than four times the official poverty level won’t qualify for any financial assistance under the Affordable Care Act if the enhanced tax credits expire.

“If they can’t afford the premiums, they’re not going to rearrange the other costs in their life to make sure they keep health care,” Altman said. “Those are the people we’re going to lose, which means on average we’ll have a less healthy population, which makes premiums higher.”

People who enroll in Covered California to buy insurance through the marketplace are those who don’t have employment where they are offered affordable health benefits. That includes small business owners and their employees and other types of workers.

“Recent data nationally says more than one in four farmers and agricultural workers are on the marketplace in this country,” Altman said. “A lot of them don’t have stable benefits, folks like hairdressers, nail technicians, gig economy workers (or) freelancers. …”

Altman acknowledged that Congress could still act before Jan. 1 to extend the credit, but that could prove confusing to enrollees if it happens after renewal and premium notices go out on Oct. 15. Covered California already established two sets of premium rates, one in case the tax credit is extended, and another if it is allowed to expire.