States grapple with uncertain future of health care subsidies 

Tax credits that made health coverage through the federal Marketplace affordable are set to expire at the end of this year, and remain the key impasse in negotiations to reopen the federal government. Millions of Americans in states that have their own marketplaces are beginning to see the massive increase to insurance premiums. KFF’s Amanda Seitz and Julie Appleby report on the many uncertainties states face as they hope for a last-minute deal: 

If Congress does manage to strike a deal in the coming days or weeks to extend some subsidies, the prices and types of plans available on the online marketplaces could change dramatically, bringing unprecedented uncertainty and upheaval to this year’s open enrollment, which begins in most states on Nov. 1. Michele Eberle, executive director of the Maryland Health Benefit Exchange, the state-run marketplace, is gaming out strategies should that happen, including the possibility of pausing enrollment so her 200-person team can update the plans to reflect any changes, should Congress pass a new bill on ACA subsidies.

Rising premium costs could cause young, healthy people to drop their coverage, which would have catastrophic consequences for the health insurance industry. NPR’s Selena Simmons-Duffin explains: 

This is what’s called a death spiral for an insurance market, [Cynthia Cox of KFF] explains. “Premiums get so high that only the sickest of the sickest people are enrolled, and eventually insurance companies just are not going to want to participate in a market like that — it’s just not going to function.” Although it is a relatively small portion of Americans who buy these plans, it has the potential to hurt everyone, regardless of how they’re insured. If more people in the country become uninsured, that’s hard on hospitals and health care access.

Racial health disparities could widen amid federal cuts 

Existing health disparities, including discrimination and access to medical care, already shorten the lifespans of people of color and people with low incomes. Statelines’ Nada Hassanein explains how recent federal funding cuts could further increase racial health disparities: 

“COVID revealed the impact of health disparities to individual health — as well as how not addressing these disparities undermines the health system for everyone,” said Dr. Georges Benjamin, executive director of the American Public Health Association. Now, many of the programs trying to address health disparities are being rolled back. As a result, health policy experts, clinicians and researchers fear those disparities will widen as states, universities and nonprofits grapple with lost federal dollars while the administration continues to limit federal funding for DEI programs.

States should decouple from megabill’s corporate tax breaks

The corporate tax breaks included in the federal megabill will result in less revenue for states that have tax systems that automatically conform to federal policy changes. A new brief from the Institute on Taxation and Economic Policy calls for states to “decouple” from four costly corporate tax provisions, including bonus depreciation: 

This rule allows businesses to write off the full cost of machinery and equipment in the first year they are placed in service, rather than spreading that cost over the useful life of the asset. It also provides a new temporary 100 percent write-off for manufacturing plants. What this means is that a highly profitable corporation can make it appear that it does not have any taxable profits at all, so long as it is buying up equipment and building factories. In other words, rather than spreading out the deduction over assets’ useful lives, bonus depreciation bunches all deductions into year one, creating a massive upfront tax break.

The Louisiana Legislature passed, and Gov. Jeff Landry signed, a package of tax changes in 2024 that allows bonus depreciation. 

Solving Louisiana’s absenteeism problem

Sharon Latten Clark is the leader of the Truancy Study Group, which Louisiana lawmakers recently created to explore ways to reduce the state’s high rate of student absenteeism. She recently sat down with The Times-Picayune | Baton Rouge Advocate’s Elyse Carmosino after the group’s first meeting to provide insight into those efforts: 

It was an eye-opener. It was very interesting to sit with people who bring other perspectives — a community perspective, a legislative perspective, (the Louisiana Department of Education) perspective — and talk about what we can all bring to the table to solve this for the state. One concern I have is every district is using a different standard for data collection. Some districts say a student is chronically absent after 10 missed days, others say five. That makes it more difficult for data collection.

Latten Clark explained where she stands on the idea of reducing state funding for public schools with high truancy rates:

I’m not for that. If we’re struggling with the funds we have now to implement programs to make sure children are there, if you take those funds away, we’ll be at a deficit.

Number of the Day

79% – Percentage of Americans who believe it is the responsibility of the government to provide health insurance coverage to low-income Americans who cannot afford it. (Source: KFF)