About 100,000 Virginians lost their Marketplace health insurance late last year after federal subsidies expired and premiums surged. Now, a new state program could help many of them afford coverage again.
The General Assembly approved a new health insurance affordability program as part of Virginia’s state budget, directing $150 million to reduce premiums for qualifying Marketplace enrollees.
The funding will lower monthly premiums for about 200,000 Virginians, according to Keven Patchett, director of the Virginia Health Benefit Exchange. In addition to helping people who lost their coverage, it will also be available to consumers who kept their coverage despite rising costs and who qualify for the program.
Individuals and families with household incomes that fall between 138% and 250% of the federal poverty level qualify for the state subsidies. That equates to annual incomes of $22,025 to $39,900 for an individual, or $45,540 or $82,500 for a family of four.
Virginia created the program after Congress allowed enhanced federal premium tax credits to expire, causing Virginia’s Marketplace premiums to rise by an average of 75%. For some Virginians, monthly premiums doubled, Patchett said.
Enhanced premium tax credits were introduced in 2021 as part of the American Rescue Plan Act during the COVID-19 pandemic and were extended under the Inflation Reduction Act in 2022. They reduced monthly premiums for Marketplace enrollees whose incomes fell between 100% and 400% of the federal poverty level. Congress did not renew the credits after they expired in 2025.
Some federal subsidies established before the COVID-19 pandemic are still in place. The new state subsidies will be added to the existing federal subsidies, Patchett said.
The premium increases hit lower-income Virginians especially hard. Consumers with incomes between 100% and 250% of the federal poverty level accounted for more than 60% of Marketplace plan cancellations this year, according to Mark Robinson, communications manager for the exchange.
“The vast majority of people who get their coverage through the Marketplace don’t have any other place where they can get health insurance coverage,” Patchett said.
Most make too much money annually to qualify for Medicaid but do not receive health insurance through an employer. Patchett said many who dropped their Marketplace plans are likely uninsured today.
More than 200,000 Virginians previously benefited from the enhanced federal tax subsidies. Their expiration also affected people who kept their coverage. As healthier consumers dropped their plans because of rising costs, insurers lost lower-cost members who helped balance the risk pool, putting upward pressure on premiums.
Virginia would need to invest $234 million annually to fully replace the lost federal subsidies. Although the new state program will not make up the entire difference, Patchett said the funds will be used to provide the greatest benefit with the available funding.
“This isn’t going to cover all that lost funding, but I think it is going to make a meaningful impact for a lot of Virginians,” he said. “And how long there’s funding beyond 2027, we don’t know, but we’re focused on maximizing the impact to Virginians for this upcoming year.”
Consumers will see the state subsidy displayed alongside available federal assistance when they shop for coverage during open enrollment, which begins Nov. 1.
The exchange also plans a statewide outreach campaign to raise awareness of the new program. Patchett said his team will work with insurance navigators and agents across Virginia and launch social media campaigns to encourage enrollment.
Still, he worries about reconnecting with people who have already canceled their coverage.
“We know that it’s easier to retain customers than it is to bring them back,” he said. “People’s contact information changes from year to year, and we’re always worried about, you know, people’s level of awareness as things change.”
Marketplace plans change annually, and Patchett encouraged consumers to stay in contact with navigators throughout the year to understand their coverage options.
While open enrollment begins Nov. 1, some consumers may qualify for coverage during special enrollment periods. This includes things like getting married, losing employer-sponsored insurance or having a baby.
Consumers can find in-person navigators by searching with their ZIP code or contacting the Marketplace customer service center at 888-687-1501.
