Eliminating Subsidies Would Increase the Number of Uninsured

Ending ACA subsidies would increase premium costs in the individual exchanges by as much as 43% and cause enrollment to drop 68%, according to a RAND study. The tax subsidies have been challenged, in federal courts across the country, on the grounds that the wording of the law only allows aid to people who buy policies through state-run exchanges. “If subsidies are eliminated entirely, our research predicts substantial disruption in the individual health insurance market,” said Christine Eibner of RAND.

Replacing subsidies with vouchers would make the health insurance exchanges more sensitive to changes in the age mix of those enrolling. For example, with vouchers instead of tax credits, each 1% reduction in young adult enrollment would trigger a premium increase of about three-quarters of 1% on the insurance exchanges. A 1% reduction in young adult enrollment would trigger less than one-half of 1% – with the ACA’s tax credit structure. For more information, visitwww.rand.org.

Last Updated 10/20/2021

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