Congress continues to fine-tune the Affordable Care Act in an effort to expand coverage and hold the line on cost. Legislators are considering two reforms to the ACA as part of the fiscal year 20222 budget process.
Make the American Rescue Plan Act premium subsidies permanent. The act temporarily enhances premium tax credits in the Marketplace for 2021 and 2022. It lowers the limits on premiums paid by families who were eligible for subsidies before the legislation and expands eligibility for subsidies to individuals and families who previously were ineligible because their incomes were greater than 400% of the federal poverty line (more than $106,000 for a family of four).
Extend eligibility for Marketplace subsidies in non-expansion states. Nearly six million uninsured adults living in the 12 non-expansion states do not have access to affordable health insurance coverage. Although health insurance coverage through the Marketplace is not as comprehensive as Medicaid coverage, expanding eligibility for Marketplace subsidies to this group results in large increases in coverage.
The Commonwealth Fund studied the potential coverage and cost implications of these two reforms. Among the highlights:
- Making rescue premium subsidies permanent and filling the Medicaid coverage gap would reduce the number of people without insurance by nearly one-quarter, or seven million people, in 2022.
- All states would see a drop in their uninsured population, with the largest percentage declines in states that have not yet expanded Medicaid eligibility.
- Enrollment in subsidized Marketplace plans would nearly double, while premiums would fall by 18% on average.
- Federal spending would increase by an estimated $442 billion over 10 years and, after accounting for increased revenues because of higher wages and some offsetting savings, this reform would increase the federal deficit by an estimated $333 billion if no other changes in policy were made.
“We estimate that making the enhanced ARPA subsidies permanent and filling the Medicaid coverage gap by expanding Marketplace eligibility to those earning below 100% of the federal poverty line would have significant changes on coverage,” researchers concluded. “Together, these two policies would broadly expand eligibility for Marketplace subsidies, reduce the number of uninsured people, especially at lower income levels, and lessen household financial burdens for health care.”