Virginia Sees 33,000 ACA Enrollment Drop Since Subsidies Expired, More Likely on the Way

What might be pocket change to some can be a breaking point for others — forcing tough choices between health insurance and everyday essentials.

As Virginians and Americans nationwide face premium spikes in the Affordable Care Act marketplace after Congress failed to renew subsidies, many are weighing the cost of coverage against paying rent or mortgages, making car payments, paying for public transit, and buying groceries.

A new federal report indicates 1.2 million fewer Americans signed up for ACA insurance during the most recent open enrollment period nationwide.

In Virginia, about 33,000 people have dropped off, State Health Exchange Director Keven Patchett said at a forum with the State Corporation Commission.

“That’s the biggest drop-off in the first quarter that we’ve seen,” he told SCC members of the State Corporation Commission at Thursday’s event in downtown Richmond.

Overall, an estimated 100,000 Virginians who have utilized the subsidies are expected to be affected — either by enduring higher premiums, shifting to lower-tier coverage, or foregoing the insurance altogether.

The total ACA drop-offs in the commonwealth remain a moving target for several reasons, Patchett said, but more clarity could emerge in the coming days or weeks.

That’s because the 90-day grace period for non-payment recently ended, and it will take time to sort through the data more accurately.

Virginia Association of Health Plans Director Doug Gray added that some people may continue to drop the insurance throughout the year — initially absorbing higher premiums before eventually falling off, or they may gain employer-provided insurance and not need ACA anymore.

The 90-day grace period allows people who don’t cancel their enrollment to remain covered without paying until they lose insurance at that threshold.

Patchett explained that with the period now over, it could take days or weeks for “administrative and technical processes to run their course.” Insurance carriers must confirm payments haven’t been made and send that information to Virginia’s exchange to reconcile with enrollment records.

Overall, Gray said if Virginia can keep the number under 100,000, he’d “call that a victory.”

He added: “We’re not there yet, and that doesn’t mean it won’t get worse.”

The ACA allows states to establish their own health exchanges to serve people who don’t have employer-provided health insurance and earn too much to qualify for Medicaid, but would still struggle to afford coverage on the private market.

Congressionally-approved subsidies in recent years helped ACA marketplaces reach further into the federal poverty level, but lawmakers failed to renew them earlier this year — teeing up a broader health care policy debate likely to shape congressional midterm elections in the months ahead.

A “stable and competitive market” helps keep costs down, Gray emphasized.

For instance, Aetna’s exit from the marketplace last fall left consumers with one fewer option to compare prices.

To address affordability challenges in the interim, state lawmakers have proposed creating a state-level version of ACA subsidies in the next budget. While the House and Senate differ on funding levels and the potential for special enrollment periods, they are set to reconvene later this month to reach a final agreement for Gov. Abigail Spanberger to consider.

The proposed funding comes as lawmakers are also grappling with new investments in social services departments to comply with a reconciliation bill Congress passed last summer that made changes to Medicaid and the Supplemental Nutrition Assistance Program.

Those investments could help prevent eligible people from losing coverage and assist struggling households in affording groceries.

Dubbed the “One Big Beautiful Bill Act” when it passed, the measure — also known as H.R. 1 — was later rebranded by Republicans as the “Working Families Tax Cut Act.”  In addition to changes to Medicaid and SNAP, it included tax cuts that primarily benefit higher-income earners, along with increased funding for the military and U.S. border enforcement.

Its health care provisions, however, have drawn pushback from primarily Democratic lawmakers as well as providers and health care advocates.

“Shocks like H.R. 1 are not helpful,” Gray said Thursday.

He added that ripple effects between ACA and Medicaid coverage losses could increase the uninsured population, pushing more people toward free clinics or emergency rooms.

Some may manage chronic conditions at free clinics, while others may delay care until emergencies arise. Hospitals often absorb uncompensated care, which can eventually lead to higher cost for privately insured patients.

Boosting funding for free clinics is another proposal lawmakers are considering later this month. A $5 million increase over the next two years could support clinics, though several have told The Mercury they are already strained. Still, Western Tidewater Free Clinic Director Ashley Greene noted that 75% of patients are kept out of local emergency rooms.

“There’s that much more room for true emergencies,” she said in a recent call, underscoring the relationship between hospitals and free clinics in serving patients.

As enrollment numbers continue to fluctuate, lawmakers are expected to address the issue in the short term. They will reconvene at the state Capitol on April 22 and 23 to resolve amendments to legislation passed this year and finalize the budget with Spanberger.

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