Virginians looking to purchase Affordable Care Act health insurance plans are set to have both fewer choices and higher prices for the 2027 plan year, although state-level subsidies may mitigate that for some people.
Broadly, insurance premiums are determined by the claims a company pays out and how many people share those claim costs. In the case of Virginia’s Insurance Marketplace, insurers are expecting costs to go up while the number of people sharing those costs go down.
Either of those trends alone is enough to increase premiums. Both are happening in Virginia, driven by the expiration of federal subsidies and cuts to federal support for healthcare.
While the General Assembly approved a few measures earlier this year to mitigate costs, the average rate increase health insurance companies are asking for is 16.7%, putting the average premium at $676.11 per month before state assistance, according to the State Corporation Commission.
The SCC said that “medical costs and changes in federal law” were the main reasons for the increase. Insurers said the same in answers to questions from the commission, which is reviewing proposed premiums.
“We expected the expiration of enhanced premium tax credits (ePTCs) to significantly increase the out-of-pocket premium paid by most members participating on the exchange,” wrote Anthem Health Plans of Virginia. “This in turn would lead to significant reductions in the number of households who would purchase policies on the individual exchange. Furthermore, those who were projected to drop coverage would be significantly healthier on average than those who retained coverage.”
The ePTCs were health care subsidies provided to consumers that otherwise would have made too much income to qualify for other Obamacare plans. Those were available to people making about 400% of the federal poverty level ($86,560 for a family of two in 2026).
Congress created the enhanced subsidies during the pandemic in the 2021 American Rescue Plan Act, then later extended them through 2025 in the 2022 Inflation Reduction Act.
Votes by Virginia’s congressional delegation surrounding the ePTCs’ expiration in December are set to be a key issue in the midterm elections.
The federal actions have put pressure on Virginia elected officials to make up the difference, most notably to lower prices in order to insure more people.
”We will keep pushing, even as federal uncertainty makes it harder for those tools to go as far as families need them to,” said Secretary of Health and Human Resources Marvin Figueroa in a statement to VPM News, of legislative actions on healthcare affordability passed this year.
Melanie Anne Egorin, a public health and policy professor at the University of Virginia, told VPM News that prices do matter, even when something as consequential as healthcare is involved.
“Consumers are incredibly price sensitive about how much health insurance costs,” she said. “With the enhanced premium tax credits going away, many consumers are seeing large increases in the cost of health insurance, and are making the decision of is this something that fits within my budget, especially at a time where so many other costs are going up.”
State legislators passed two major measures to mitigate the premium increases within the commonwealth, alongside other regulatory changes targeting health insurance costs:
- a bill the changed regulations of the state's reinsurance program, which reduced premiums by about 15%, according to a recent State Corporation Commission release
- the finalized state budget running through June 30, 2028, also included $150 million for the premium assistance to backfill the ePTC expiration, targeting a 70% reduction in premiums (those making between 138% and 250% of the federal poverty level can liquify for Virginia Premium Assistance)
“It’s not a one-for-one replacement, though. We’re not going to be able to do everything that was being done before. We don’t print money, unlike the federal government,” said Del. Rodney Willett (D–Henrico), chair of the House’s Health and Human Services committee, of the subsidies. “But we did the best we can, and so that will help a number of Virginians.”
Consumers will be able to estimate what level of state-level subsidy assistance they could get beginning in October. Keven Patchett, the executive director of Virginia’s Health Benefit Exchange, said in a statement to VPM News that the exchange is designing the subsidies to reduce monthly after accounting for carrier rate increases.
Egorin added that competition helps lower prices. Fewer companies are offering plans this year than last.
But she said getting more people insured is the best way to lower insurance prices.
“The best way to actually lower prices is to enroll more people and to diversify who is enrolling,” she said. “Having more people in the system means that it brings prices down because, on average, we are healthier than we, as a larger group, than as an individual.”