Higher subsidies drive record ACA enrollment

It’s everyone’s favorite time of year: open enrollment season. 

Most people in the U.S. get health insurance through work. But in the last couple of years a record number have been signing up for Affordable Care Act coverage through the federal or state marketplaces. That’s in part because of more-generous pandemic-era subsidies.

More than 16 million people signed up for ACA coverage last year during open enrollment — a record. 

“One big change is the more generous premium subsidies that Congress enacted in 2021,” said Matthew Fiedler at the Brookings Institution.

Fiedler said Congress has since extended those higher pandemic-era subsidies through 2025.

“The federal government has also been doing more marketing for Healthcare.gov” to get the word out, Fiedler said, so people know they can get help paying for insurance. 

Just about everyone looking for an ACA plan is eligible for a higher subsidy than before, said Vivian Ho at Rice University.

“But in particular, there were increases in subsidies for families who were earning 400% of the federal poverty level or higher,” Ho said. That’s about $120,000 a year for a family of four.

And previously, she said, “those slightly higher income households did not receive any assistance from the federal government to purchase health insurance plans. So that provides another group of people who are able to afford health insurance.”

For the coming year — 2024 — Cynthia Cox at the health policy nonprofit KFF said there’s another group that’s likely to sign up for coverage in large numbers: people who’ve just lost Medicaid.

“Millions of people have been disenrolled from Medicaid in the last several months because of the end of some pandemic-era protections,” Cox said. “Some of those people have found their way on to the ACA marketplaces, but we’re expecting that many more will be coming on, too.”

Anyone shopping for an ACA plan this year might notice that premiums are going up, by about 5%.

“But, even though the sticker price of the premium is going up, the subsidies are also changing,” Cox said.

So, she said, most people should be able to find a plan for about the same amount.