How the Expiration of ACA Tax Credits Will Impact Commercial Insurance, Per a Cigna Exec

The government shutdown is still underway, and a key sticking point of this shutdown is the expiration of the Affordable Care Act’s enhanced premium tax credits at the end of the year. 

These were introduced in 2021 and lowered monthly premiums for those who buy coverage on the marketplaces. Democratic lawmakers are calling for an extension of the tax credits, while Republicans have been more reluctant. It’s estimated that if the tax credits expire, ACA Marketplace premiums will more than double on average next year.

But it’s not just those receiving coverage on the marketplaces that will be affected by the expiration of the enhanced premium tax credits, according to Dr. Amy Flaster, chief medical officer of Cigna Healthcare.

“This has implications in terms of overall access to care for members, and we also believe it will have financial implications across the entire population, including employer-sponsored insurance and commercial populations, in terms of premiums needing to go up to help support what we think the effect of the end of the exchange credits will look like,” she said.

Flaster made these comments during an interview at the recent HLTH conference in Las Vegas. Cigna has a relatively small ACA business, but a large commercial business, which is why the broader impact of these tax credits is particularly concerning to Flaster.

“It’s something I’m personally worried about, and want to make sure that as many people have access to care as possible at an affordable price as possible, both exchange members, but also employers that are very cognizant of their premiums and [are] dealing with the same affordability challenges,” she continued.

If the tax credits expire, more Americans will be uncovered and it’s likely that provider systems will have to deliver more care that is not reimbursed. This will have a “spillover effect” on the rest of the healthcare system, Flaster added.

“It will mean that provider systems that may already be feeling financial pressure may feel even more pressure,” she said. “There may be patients with increased access issues, and there may be an increase in premiums for commercial members, because the commercial plans may be helping to offset some of the other elements of unreimbursed care.”

The CEO of the Business Group on Health, Ellen Kelsay, made similar comments to MedCity News back in April about cuts to Medicaid. These cuts may cause hospitals and providers to charge commercial plans more to make up for the loss they incur from government-funded programs.

“I’ve spoken to a few health plan executives that will say things very bluntly, like, ‘Well, if we are getting cut here, that means we’re gonna have to turn around and charge the commercial market more.’ As if it’s just an assumption that the commercial market is going to keep paying more, and they can’t,” Kelsay previously told MedCity News.

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