Marketplace Health Insurance Premium Costs to Arkansas Consumers Could Jump 84% if Enhanced Subsidies Expire

A new KFF analysis finds that health insurance premium payments for Arkansans buying coverage through the health insurance marketplace could increase by an average of 84% — or $828 in annual payments, an increase from $984 to $1,812 — if Congress allows enhanced subsidies to expire next year.

The enhanced subsidies, temporarily authorized for two years during the COVID-19 public health emergency through the American Plan Rescue Act of 2021, were extended by Congress for three years through the Inflation Reduction Act of 2022 (IRA). The health insurance marketplaces, created by the Patient Protection and Affordable Care Act of 2010 and launched in 2014, provide subsidies, or advance premium tax credits, to individuals with household incomes up to four times the poverty level ($103,280 for a family of three) to assist with the purchase of health insurance. Some individuals also receive assistance with cost sharing when they access services offered by the health insurance plan.

Due in part to the IRA’s enhanced subsidies and more extensive outreach, health insurance marketplace enrollment hit a record high at the beginning of 2024 of over 21 million nationally, nearly double the enrollment in 2020. The Arkansas Health Insurance Marketplace had its highest enrollment in March 2024 with 152,616, more than double the average enrollment in 2020 of about 60,000.

The increase in health insurance marketplace enrollment nationally and in Arkansas coincides with disenrollment by state Medicaid programs as part of their “unwinding” processes. During the COVID-19 public health emergency, in exchange for enhanced federal funding, states were prohibited from disenrolling individuals from Medicaid (except in limited circumstances). In April 2023, states were permitted to resume reviewing eligibility for Medicaid enrollees and disenrolling those who were no longer eligible or who did not complete the renewal process.

In Arkansas, Medicaid unwinding reduced Medicaid enrollment from 1,151,347 to 868,059, which is about 5% less than average total enrollment in 2019. Concurrent increases in Arkansas’s marketplace enrollment suggest that some who were disenrolled from Medicaid transitioned to subsidized plans bought on the marketplace.

The Congressional Budget Office (CBO) estimates that marketplace enrollment would decline to about 15 million nationally by 2030 if Congress allows the enhanced subsidies to expire. The CBO projects that the cost of a 10-year extension of the enhanced subsidies would be $335 billion.

If Congress does not make a decision to extend enhanced subsidies by next summer, insurers will be in quite a bind, because they must finalize their 2026 marketplace premium rates by August of 2025. Arkansas insurers have proposed an average increase of 4.2% for their 2025 marketplace premium rates.