Health insurance company stocks jumped Monday on news the Donald Trump White House and Republicans in Congress will float an extension of tax credits for those with low and moderate incomes so they can afford individual coverage under the Affordable Care Act.
The tax credits, or subsidies, make health insurance premiums more affordable for individuals. They were enhanced by the Biden administration and the Democratic-controlled Congress in 2021, allowing more Americans to buy coverage. The enhanced subsidies, which expire at the end of this year, helped enrollment in the ACA’s individual coverage, also known as Obamacare, eclipse a record 24 million Americans, boosting its popularity to all-time highs.
A Politico report Sunday night said the White House would “soon unveil a health policy framework that includes a two-year extension of Obamacare subsidies due to expire at the end of next month and new limits on eligibility.” And an MSNow report earlier Sunday said the idea would be to prevent huge spikes in premiums.
Republicans who control both houses of Congress are worried they will be blamed for coming premium increases if the subsidies aren’t extended. Polls show widespread support among Republicans who want Congress to extend tax credits
Specific details had yet to emerge Monday afternoon from either the White House or Republicans in Congress. The MSNow reporter Monday said a White House announcement is being delayed due to Congressional backlash.
Still, the news of an extension in the works sent stocks rising for health insurance companies that have millions of Obamacare enrollees.
The price of shares of Oscar Health, one of the nation’s largest providers of Obamacare with about 2 million enrollees, jumped more than 20%, or nearly $3 a share, to $16.27 in mid-afternoon trading on the New York Stock Exchange. Meanwhile, the price of shares of Centene, which has more than 5 million Obamacare enrollees, rose nearly $2 a share, or more than 5%, to $38.44 in mid-afternoon trading.
The price of UnitedHealth Group shares was up $2 a share, or less than 1%, to $321.90. UnitedHealth is parent of UnitedHealthcare, the nation’s largest health insurer with more than 50 million health plan enrollees in all of the plans it sells, including about 1.7 million enrollees in its Obamacare plans.
If Congress doesn’t extend the tax credits, Americans who buy coverage via the government’s healthcare.gov exchange or other state exchanges will see a major spike in premiums — 75% or more, health insurers have said. Open enrollment began Nov. 1 and runs to Dec. 15.
In the last month, health insurers are already reporting they expect to lose customers without the enhanced subsidies. As one example, UnitedHealthcare said last month that rate increases of more than 25% and “targeted service area” reductions could reduce its Obamacare customer base by about “two-thirds.”
America’s Health Insurance Plans, the trade group and lobby for the health insurance industry, could not be reached Monday for comment.