Expiring subsidies threaten ACA market stability
The discussion outlined a risk that expiring federal subsidies will cause healthier enrollees to drop Affordable Care Act (ACA) coverage, destabilizing the risk pool and driving premiums higher.
The argument
Analysts argued that losing healthier individuals forces insurers to spread risk across a smaller, sicker pool, which is expected to push premiums up further after already rising 60% on average.
The thesis, stress-tested
✓ What validates it
- ✓KFF reports a drop of over 5 million ACA enrollees by year-end
- ✓Insurers announce double-digit premium increases for the next enrollment cycle
▸ Risks discussed
- ▸Congress could pass eleventh-hour funding extensions to preserve subsidies
- ▸Insurers could find cost-saving efficiencies to limit premium hikes
Hear it yourself
"That's Tom Seng with Texas Christian University who worked in Oklahoma's energy sector for years. You'd have to see $70 a barrel going out for several years to be able to say, hey. When we drill this well, which we expect to produce for twenty years, we have to get a return on it that our shareholders are gonna be happy with. There's also a geological reason Oklahoma isn't seeing a big boost from the energy supply crunch, says Courtney Cowley, who is based in Oklahoma with the Kansas City Fed. In Oklahoma, we tend to have basins and plays that are much higher in gas content."