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Penny: end of enhanced federal premium tax credits could push hundreds of thousands from coverage; state affordability option proposed
Summary
Devon Trolli, executive director of Penny, told lawmakers that if Congress does not extend enhanced federal premium tax credits beyond 2025, Pennsylvanians on the exchange could face average premium increases of 82% and as many as about 150,000 people could drop coverage.
Devon Trolli, executive director of Penny (Pennsylvania's health insurance marketplace), told a legislative budget hearing that the federal enhanced premium tax credits under the American Rescue Plan and later legislation spurred a nearly 50% jump in Marketplace enrollment and helped Penny reach record coverage levels — roughly a half‑million Pennsylvanians.
Trolli warned lawmakers that the enhanced credits are scheduled to expire under current federal law at the end of the year, and that failure by Congress to extend them could have large effects. "If those [enhanced tax credits] were to go away ... Penny enrollees would be looking at an 82% premium increase," Trolli said, adding that in many rural areas premiums could double. He estimated that about 435,000 of Penny's enrollees would be affected and said the program could see around 150,000 people drop coverage if the credits lapse.
Lawmakers discussed state options to shore up affordability. Director Trolli and other department witnesses described a proposed State Affordability Program that, in the department's outline, would target households with incomes between about $22,000 and $45,000 annually. Under the structure discussed by staff, a relatively modest premium subsidy (the department used an example of $20 per month) could allow enrollees to "buy up" to richer plans, reducing out‑of‑pocket exposure and delivering multiple times the premium cost in reduced cost‑sharing.
"We have a lot of people who are just barely or not affording coverage," Trolli said. The department cited survey results showing roughly 80% of uninsured respondents reported cost as the primary barrier to coverage and that about 60% of current enrollees consider their coverage barely affordable.
The department said it would automatically apply state affordability benefits at open enrollment for qualifying Penny enrollees and encouraged lawmakers to fund the program. The hearing included requests from legislators for contingency planning materials the administration said it would supply.
