Why Did My Health Insurance Premium Go Up in the Middle of the Year?
- 4 hours ago
- 4 min read
Understanding the Two Most Common Reasons Marketplace Health Plans Lose Subsidies
Many families across Utah have recently received letters and notices saying that their health insurance premiums have increased or that they have lost some or all of their Marketplace subsidies. If you've opened a letter and suddenly noticed your monthly premium is much higher than it was before, don't panic. In most cases, there are two common reasons this happens, and both can often be fixed.
At Utah Avenue Insurance, we help families every day understand why their health insurance costs changed and what steps they can take to get their subsidies back.
What Are Health Insurance Subsidies?
Marketplace subsidies, also called Premium Tax Credits (PTC), are financial assistance provided by the federal government to help lower the cost of health insurance premiums. These subsidies are based on your household size and estimated annual income.
When you enroll in a Marketplace health insurance plan, the government pays part of your premium each month directly to the insurance company. This lowers what you have to pay out of pocket for your health insurance.
Because the subsidy amount is based on estimated income, the IRS requires you to reconcile those subsidies each year when you file your federal tax return.
Reason #1: You Did Not File Taxes or Reconcile Your Subsidies
The most common reason people lose their Marketplace subsidies is because they either:
Did not file their federal tax return for 2023 or 2024.
Filed their tax return but did not reconcile the subsidies they received.
Filed taxes but forgot to include the required Marketplace tax forms.
When you receive Marketplace subsidies, the IRS requires you to compare the subsidy you received during the year with the subsidy you actually qualified for based on your final income. This process is called reconciliation.
If you do not complete this process, the Marketplace may remove your subsidies until the issue is corrected.
What Is Form 1095-A?
Form 1095-A is a tax document sent by the Marketplace each year. It shows:
Who was covered on the Marketplace plan.
The monthly premium for the plan.
The amount of subsidy received each month.
Information needed to complete IRS Form 8962.
Your tax preparer uses Form 1095-A to reconcile the subsidies you received throughout the year.
If you misplaced your 1095-A or never received it, a local agent at Utah Avenue Insurance can help you obtain a copy and make sure you have the information needed to complete your tax filing.
Can I Get My Subsidies Back?
In many cases, yes.
If your subsidies were removed because you had not filed your taxes or reconciled your Marketplace assistance, you may be able to regain your subsidies after filing the required tax return and completing the reconciliation process.
A local health insurance agent at Utah Avenue Insurance can help update your Marketplace application once your taxes have been filed and processed so you can receive the financial assistance you qualify for.
Reason #2: Someone on Your Application Has Medicaid
The second most common reason families lose Marketplace subsidies is because the Marketplace receives information showing that one or more family members are enrolled in Medicaid.
The federal government regularly performs eligibility checks with state Medicaid programs to verify who has Medicaid coverage and who is receiving Marketplace subsidies.
Why Can't You Have Both?
Marketplace subsidies and Medicaid are both government-funded health coverage programs.
Federal rules generally do not allow someone to receive Marketplace premium tax credits while also being enrolled in Medicaid. Since both programs are designed to help pay for health coverage, a person cannot usually receive financial assistance from both programs at the same time.
When the Marketplace finds that someone is enrolled in Medicaid, subsidies for that individual may be removed. In some cases, this can affect the subsidy amount for the entire household.
These verification checks help ensure that government assistance is being provided correctly and that taxpayers are not paying for duplicate coverage.
What Should I Do If Someone Has Medicaid?
If one or more members of your family have Medicaid, you may need to update your Marketplace application.
For example, if the children in your household qualify for Medicaid but the parents do not, the children may need to be removed from the Marketplace plan while the parents continue receiving Marketplace coverage and subsidies.
A local agent at Utah Avenue Insurance can help review your application and make sure everyone is enrolled in the correct program.
What If I Don't Think I Have Medicaid?
Sometimes people are flagged as having Medicaid even when they believe their coverage has ended.
If this happens, you should contact your state's Medicaid office or visit the state Medicaid website to verify your status.
You may be able to obtain:
A Medicaid denial letter.
A termination letter showing Medicaid coverage ended.
Verification that no active Medicaid coverage exists.
These documents can often be submitted to the Marketplace to resolve the issue and restore eligible subsidies.
Don't Overpay for Health Insurance
If your health insurance premium suddenly increased in the middle of the year, there is a good chance the issue is related to tax filing requirements or Medicaid eligibility verification.
The good news is that many of these situations can be corrected.
A local health insurance agent at Utah Avenue Insurance can help you understand why your premium increased, review any notices you received, update your Marketplace application, and help ensure you receive every subsidy you are entitled to.
Health insurance rules can be confusing, but you do not have to figure them out alone.
Better coverage starts here.
Contact Utah Avenue Insurance today and let one of our local health insurance agents help you keep the Marketplace subsidies you qualify for and avoid paying more for health insurance than necessary.
