How Expiring ACA Tax Credits Will Impact Commercial Insurance, According to Cigna Executive

The government shutdown is still ongoing, and one of the biggest sticking points in that 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 reduced monthly premiums for those purchasing cover on the markets. Democratic lawmakers are calling for an extension of the tax credits, while Republicans are more reluctant. It is estimated that if the tax credits expire, ACA Marketplace premiums will more than double on average next year.

But it’s not just those with coverage on the marketplaces who will be affected by the expiration of 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 population, including employer-sponsored insurance and commercial populations, in terms of premiums having to increase to help support what we think the effect of ending exchange credits will look like,” she said.

Flaster made the comments during an interview at the recent HLTH conference in Las Vegas. Cigna has a relatively small ACA business, but a significant commercial business, so the broader impact of these tax credits is of particular concern to Flaster.

“This is something that concerns me personally and I want to make sure that as many people as possible have access to affordable care, both exchange members and employers who are very conscious of their premiums and [are] face the same affordability challenges,” she continued.

If the tax credits expire, more Americans will be found out and it is likely that provider systems will have to provide more care that will not be reimbursed. This will have a “ripple effect” on the rest of the health system, Flaster added.

“This means that provider systems that are already under financial pressure could feel even more pressure,” she said. “There may be patients with increased access issues, and there may be increased premiums for commercial members because commercial plans can help offset some of the other elements of unreimbursed care.”

Business Group on Health CEO Ellen Kelsay made similar comments to MedCity News in April about Medicaid budget cuts. These reductions could lead hospitals and providers to charge commercial plans more to make up for losses they incur under government-funded programs.

“I’ve talked to a few health plan executives who will say things very bluntly, like, ‘Well, if we’re downsized here, that means we’re going to have to turn around and charge more to the commercial market.’ “Like it’s just an assumption that the commercial market is going to continue to pay more, and they can’t,” Kelsay told MedCity News.

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