Washington State Health Insurance Enrollment Declines After Loss of Federal Subsidies
Enrollment in Washington State’s health insurance marketplace, the Washington Health Benefit Exchange, decreased by approximately 19,000 individuals during the to open enrollment period, following the expiration of enhanced federal premium tax credits. While the drop was less severe than initially projected, state officials are bracing for further declines as policyholders receive bills reflecting the increased costs.
A total of residents secured coverage through the exchange, compared to during the same period last year. The Washington Health Benefit Exchange primarily serves individuals who do not have access to employer-sponsored or government-funded health insurance programs like Medicaid.
“The drop in coverage could’ve been much worse,” stated Ingrid Ulrey, CEO of the Washington Health Benefit Exchange, but cautioned that the decline represents a “pretty significant dip from last year.” She anticipates further erosion in coverage as individuals assess their premium costs. “People are going to see their bills and just say ‘I can’t do this.’”
Federal Subsidy Lapse and Political Context
The reduction in enrollment stems from the lapse of federal tax credits that had been in place during the COVID-19 pandemic. A month-long federal government shutdown last fall occurred as Democrats sought to extend these credits, while Republicans opposed the extension. The credits expired at the end of .
U.S. Senator Patty Murray (D-Wash.) criticized the Republican stance, stating, “Republicans made tax breaks for billionaires permanent and cut health care to do it. Now, we are only just beginning to see the fallout of that decision.”
Nationally, approximately 1.2 million fewer Americans enrolled in Affordable Care Act (ACA) marketplace coverage compared to the previous year, indicating a broader trend linked to the subsidy reductions.
Impact on Premiums and Risk Pools
The loss of coverage raises concerns about adverse selection within the insurance pool. Individuals who choose to forgo insurance are statistically more likely to be healthy, potentially leading to higher premiums for those who remain insured. This occurs because the remaining pool of insured individuals represents a higher risk profile for insurers.
Average premiums for individual insurance plans purchased through the Washington Health Benefit Exchange increased by 21%, partially attributable to the expiration of the enhanced tax credits. This increase aligns with similar premium hikes observed nationwide.
The financial impact of the subsidy lapse is particularly acute for certain demographics. Enrollees who previously benefited from the enhanced tax credits are now facing significantly higher monthly premiums, with some experiencing increases of two or three times their previous costs. Low-income lawfully present immigrants, including refugees and asylees, have seen their average monthly premiums jump from $25 last year to nearly $500.
A provision within the recent “big, beautiful bill” prohibits these non-citizens from accessing federal financial assistance for marketplace coverage, exacerbating their financial burden.
State-Level Mitigation Efforts and Future Challenges
Washington State has implemented measures to mitigate the impact of the federal subsidy reductions, including the Cascade Care Savings program, which provides premium assistance to residents earning up to 250% of the federal poverty line. More than Washington Healthplanfinder customers are currently receiving this state-funded assistance, an increase from last year.
However, state officials acknowledge that the long-term sustainability of this assistance is uncertain, particularly as other federal health policy changes take effect. Ulrey warned, “We’re in jeopardy for 2027, ‘28 and ‘29, and beyond. The hill that we’re climbing is only getting steeper.”
The impact of the federal subsidy lapse has been disproportionately felt in rural counties, including Okanogan and Pacific.
Approximately three-quarters of all enrollees on the exchange last year qualified for the federal tax credits, which reduced annual premiums by an average of $1,330. Senior citizens experienced even greater savings, averaging more than $1,900 annually.
Final enrollment figures are expected to be released in the spring, providing a more comprehensive assessment of the impact of the subsidy reductions on Washington State’s health insurance landscape.
