The cost of health insurance plans that covers roughly 500,000 Marylanders through a state exchange could spike next year as insurance companies brace for cuts at the federal level.

Insurers on the state’s health exchange are seeking premium increases averaging 17% for individuals and 5.5% for businesses on plans beginning next year, according to the Maryland Insurance Administration.

That could put health insurance out of reach for many middle-income people at a time when big cuts also are expected in Medicaid, the government insurance for low-income residents, insurance officials and lawmakers say. As a result, exchange officials estimate up to 70,000 people might forgo coverage.

It could also lead to a sicker population and higher health costs for all Marylanders.

“Carriers are assuming what folks will be paying out of pocket will be higher,” said Maryland Insurance Commissioner Marie Grant in a Tuesday news conference. “Younger healthier people will drop out of the market.”

The state’s health exchange was created under the federal Affordable Care Act, often called Obamacare, to boost the number of people in Maryland able to secure more affordable health insurance coverage. While most people still get their insurance through their employers, about 250,000 Marylanders buy coverage on the exchange from private carriers, plus tens of thousands more whose small-business employers also use the exchange.

The Maryland Insurance Administration also must still approve the rate increases. The agency will hold public hearings over the summer before signing off on any new rates before the fall enrollment period.

Insurers requested rate hikes largely in response to losing some federal subsidies many people have been using to lower their premiums. They expire at the end of the year, but Congress could still extend the subsidies in a pending budget bill. If they do, the Maryland insurers said they would significantly lower their requests for rate increases.

The state could also step in and replace some of the funding. The General Assembly created a program in 2019 to use fees from insurers to offset costs to insurers from the biggest health care users. State lawmakers this year authorized the insurance agency to work with the exchange to build on that program to provide further assistance if federal subsidies dry up.

State and federal lawmakers who joined the insurance commissioner at the news conference worried that Maryland’s aggressive moves to enroll people in health insurance over the years, protect benefits and make plans more affordable could be hurt by expected federal cuts pushed by the Trump administration.

State Del. Joseline Peña-Melnyk, a Democrat and chair of the Health and Government Operations Committee, said the state will try to protect gains made by reducing the number of people without health insurance in Maryland. The rate has been cut in half to about 6% since the Affordable Care Act was passed in 2010.

The federal bill, according to Democratic lawmakers in Maryland at the news conference, limits states’ ability to extend the time period for enrollment and carry people over automatically from year to year while banning subsidies for legal non-citizens, such as refugees.

“Maryland is a leader; Maryland thinks outside of the box,” she said. “What the federal government is doing is shameful.”

The officials said of the 500,000 potentially affected by the federal subsidies, more than half are in the individual market. The dominant insurer, CareFirst BlueCross BlueShield, requested the biggest average rate increase at 18.7%.

UnitedHealthcare requested an average 18.6% increase, Kaiser Permanente requested 12% and Wellpoint asked for 8.1%. Aetna plans to leave the market next year. Rate increase requests vary by plan.

The companies didn’t immediately respond to requests for comment.

According to estimates, the rate increases for a family of four enrolled in the cheapest “bronze” level plan, for example, would pay more than $1,200 a month, up about $200. An individual would pay about $355, or $60 more.

The federal budget bill will “drive up prices and increase the barriers to quality health insurance,” said Michele Eberle, executive director of Maryland Health Benefit Exchange, which operates the state exchange.

She added the exchange “has increased enrollment by 40% in the last four years because people who know how important health insurance is have found it affordable.”