How Late is Late? What Will Your Health Insurance Cost in 2023?

My brilliant youngest daughter is almost finished her doctoral program. She is so smart and so focused, even at 25 years old, she sometimes just blows me away. She finished high school and college early and is just flat-out smarter than me! Since I can’t really counsel her on her studies (many days I have no idea what she’s talking about 😊), when we talk, I like to focus on things she doesn’t have time for, like her own state of mind and outlook for her life.

She loves to plan. To look way down the road and organize things like the pieces on a chessboard. This leads me to remind her occasionally that life is an amazing journey TODAY. I tell her she should think about how good today is. It strikes me that we all could use a good dose of that, right? My mom says TODAY is the only day you can live right now. Good advice.

Looking Down the Road

Here in Health Insurance World, we make our living and demonstrate our value to more than a million people in Louisiana by predicting the future. Indeed, you’ve heard me say in these pages that the “secret sauce” of Blue Cross and Blue Shield of Louisiana is our accuracy at predicting future health care costs. It’s at the crux of what we do, as we seek to purchase, on behalf of our members, over $300 million a MONTH in health care services and pharmaceuticals. Having that number in place so far in advance has real value to everyone. If bad news is coming, you get more time to plan, to get ready for it. If good news is coming, we get to celebrate it even longer!

As we look to 2023, we are increasingly seeing some obstacles – some of them VERY scary – to our ability to predict and control your health care costs. Let’s take a good look at an important one of those obstacles:

The individual health insurance market here in Louisiana has benefitted from huge amounts of federal funding since early 2021. This enhanced funding, part of the American Rescue Plan Act of 2021, has made premiums the lowest they’ve ever been on healthcare.gov at nearly every income level. We’ve enjoyed the lowest individual health insurance rates in Louisiana since healthcare.gov was activated in 2013. Our state’s uninsured levels are at the lowest they’ve ever been. This is all good news!

This enhanced funding, however, is scheduled to expire in December 2022 unless Congress takes action very soon. Congress has to be the one to fix this because the funding is roughly $115 billion to cover the next 10-year cycle on healthcare.gov. That’s real money!

Potential Potholes

If Congress elects NOT to renew this funding (and as of this writing there is no movement in Congress on this issue, despite the imminent deadlines) then two immediate problems will arise:

1. The price of individual health insurance will rise for almost everyone. The power of these enhanced subsidies is not well understood, so let me give you a concrete example: Imagine you are a single, early retiree, 64-years-old, earning $55,000 a year, living in Baton Rouge, and buying a benchmark (Silver) health plan today. Your premium for that plan under the current scheme is $665/month. If the enhanced subsidy program is allowed to expire, your premium will jump to $1,550/month for every month of 2023 – for the same level of coverage!
2. Plans with expansive cost sharing will disappear from the marketplace. Many health insurance plans for low-income adults can be accessed today for $0 premium each month and very low annual deductibles/copays. If the enhanced subsidies are allowed to expire, these plans would be replaced with similar plans that have premiums ranging from $50-$250 per month (based on the income and age of the insured member). Lower-income Louisianians would have a much harder time finding $0 plans than they do today.

A third issue Blue Cross and other insurers will have to work out if Congress fails to act quickly is the problem of creating and filing new plans with the appropriate state and federal agencies. Our deadline to submit next year’s (2023) plans is in late June 2022. We will probably have to make those June filings based on pricing WITHOUT the current enhanced tax credits. Prices are going to go WAY up for almost everyone and by October, without Congressional action, some very scary renewal letters are going to start flowing to around 100,000 Louisianans (and about 25 million people nationwide) who currently have individual health insurance.

If Congress intends to keep individual health insurance affordable, it’s going to be critical that these enhanced subsidies are renewed, and soon to avoid the most confusion.

Straight Talk is, this is a good time for Congress to get serious about funding this program before it’s too late. Health insurance literally is a life-or-death issue. Might be a good time to reach out to your Congressman or Senator on the enhanced tax credits issue and ask them to get moving.