Arkansas Health Insurance Premiums Surge Amid Policy Changes
The Arkansas Health Insurance Marketplace has seen the highest percentage increase in average benchmark premiums nationwide this year, according to a KFF study. This surge is a result of Arkansas insurers' adjustment following the expiration of enhanced premium tax credits (PTCs) that were aimed at reducing insurance costs.
Benchmark premiums, representing the cost of the second-lowest priced silver-tier plan, have jumped from $458 in 2025 to $774 this year in Arkansas. Consequently, the state’s ranking in premium costs soared from the 16th lowest to the 7th highest nationwide. This 69% surge contrasts with a national average increase of 26%, marking a significant shift from previously lower premiums compared to neighboring states.
Arkansas insurers have implemented a strategy known as "silver loading," focusing premium increases on silver plans, thus impacting PTC calculations. This strategy potentially makes bronze and gold plans more affordable for qualifying consumers. Despite a 69% increase in benchmark premiums, bronze plans rose by 15% and gold plans by 23%, slightly differing from national averages of 20% and 21%, respectively.
This tactic results in larger PTCs for consumers, which they can apply to non-silver plans, thereby reducing insurance costs. However, this also makes silver plans less accessible to those not qualifying for PTCs. While larger PTCs decrease monthly expenses, consumers often weigh plan elements such as deductibles and out-of-pocket costs. Typically, bronze plans have lower premiums but higher deductibles, while gold plans offer more predictable expenses. For consumers with qualifying incomes, cost-sharing reductions (CSRs) on silver plans can significantly influence their decisions.
In contrast, various states have implemented different strategies to mitigate the loss of enhanced PTCs. New Mexico has utilized state funds to fully subsidize PTCs for all income levels. States like Colorado and Maryland have introduced programs to partially replace the credits for incomes up to 400% of the federal poverty level (FPL). Connecticut has fully compensated those between 100% and 200% of FPL, with partial subsidies for those between 400% and 500% of FPL. Additionally, states like California have broadened existing subsidy programs, while the District of Columbia has launched a basic health plan for low-income residents.
The current data does not yet entirely capture the effects of these policy adaptations on premium disparities among different plan tiers. It remains essential to analyze detailed enrollment and pricing data to comprehend variations in consumer preferences and the corresponding impact on their out-of-pocket expenses.