Maine Business Owner Considers Dropping Health Insurance Amid Rising Costs

A small business owner in Thomaston, Maine, is weighing the possibility of dropping her health insurance due to escalating costs and the impending expiration of federal subsidies. Chloe Chalakani, who operates a handmade pasta business with her partner, is facing a significant financial decision that could have implications for her health coverage in the upcoming year.

As the tourist season concludes and the colder months begin, Chalakani is tackling her administrative responsibilities, including health insurance enrollment. She currently pays $460 per month for the highest deductible plan available. With federal enhancements to tax credits set to expire in December 2023, she anticipates that her premiums will rise further. “I don’t plan to get insurance next year,” Chalakani stated. “I’m just not going to do it — I’ll pay out of pocket.”

This decision reflects a broader concern among health policy experts regarding the stability of the health insurance market under the Affordable Care Act (ACA). The potential for younger, healthier individuals like Chalakani to opt out of insurance could destabilize the system, which relies on a diverse pool of enrollees to function effectively.

Younger individuals generally contribute more to the system than they take out, balancing the costs incurred by older and sicker populations. “You need people to be paying into the insurance system when they’re healthy so that they can take out when they’re sick,” explained health policy analyst Jennifer Cox. Without this balance, the market could face significant challenges.

Cox notes that individuals who are younger and healthier may be more inclined to forgo insurance, while older individuals — often with higher healthcare needs — are likely to retain their coverage despite rising costs. “The concern is that the least sick person in that group is going to drop their coverage because it becomes unaffordable,” she emphasized. This cycle can lead to a situation where only the sickest individuals remain insured, driving premiums higher and causing insurance companies to withdraw from the market altogether.

The ramifications of a declining insurance market extend beyond individual health; they can impact healthcare access and hospital operations. Increased numbers of uninsured patients can strain hospitals, potentially leading to the reduction or elimination of services. “If hospitals face a lot of financial strain, they might start changing the services they offer,” Cox warned. “They may have to close the maternity ward. They might have to close down altogether.”

Chalakani’s situation is not unique. She is among 24 million Americans who purchase insurance through the ACA. Despite her understanding of the risks associated with being uninsured, including the possibility of catastrophic health events, she feels compelled to consider her financial constraints. “Should a catastrophe happen, I’ll probably say, ‘Wow, I should have had insurance,'” she acknowledged. “But at this point, I don’t have the financial ability to plan for that.”

The looming expiration of enhanced subsidies and rising premium costs pose significant challenges for many small business owners and individuals across the country. Unless Congress acts swiftly to extend these subsidies, many enrollees may experience financial shock when searching for plans for the year 2026.

As the debate continues over healthcare reform and budget allocations, the fate of many, including entrepreneurs like Chalakani, hangs in the balance. The outcome could not only affect individuals but also the overall landscape of health insurance in the United States.