Health Care Advocate: end of ARPA subsidies would hit individual market; keep small‑group market separate

The Health Care Advocate told meeting participants that the likely end of enhanced premium tax credits under the American Rescue Plan Act would sharply raise costs for people in the individual insurance market and that, given current market dynamics, Vermont should keep the small‑group market separate from the individual market.

The advocate said the markets were combined in 2013 under the principle that “a larger pool is a stronger pool, is a more stable pool, is a less volatile pool,” but that later federal changes — especially ARPA’s enhanced premium tax credits — materially changed the tradeoffs. The advocate said ARPA both extended subsidies above 400 percent of the federal poverty level and increased subsidies for people under 400 percent, and that losing those enhanced subsidies would be “a disastrous cliff.”

The office argued the enhanced credits protected many individual‑market enrollees and made it sensible to separate the markets so employers in the small‑group market would not carry the premium impacts introduced by changes in the…