Covid Relief Law Anchors Biden’s Push on Affordable Health Care

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Millions of Americans will be eligible for new subsidies for health premiums under an expansion of the Affordable Care Act that President Joe Biden signed today. Yet those already getting coverage under the law will have to actively seek out the new assistance to take advantage of it immediately.

The American Rescue Plan (H.R. 1319) passed this week includes what Biden officials call the largest coverage expansion since the ACA passed in 2010. More than 3 million people who are currently uninsured will be newly eligible for premium assistance. And, for the first time, households making more than four times the poverty level—or $106,000 for a family of four—can receive premium subsidies.

The $1.9 trillion economic stimulus law adds billions to increase ACA subsidies. The relief is set to expire after 2022 and would cost more if extended.

The help won’t come automatically right away, though. People eligible for expanded subsidies will have to log onto HealthCare.gov or similar state websites to claim them. Most will have a relatively short window to do that, between April 1, when the subsidies become available, and May 15, when a special enrollment window Biden created for the 36 states that use the federal exchange will end.

More than 200,000 people signed up for ACA coverage in the first two weeks of the special enrollment window.

People who don’t claim the expanded premium assistance, which comes in the form of premium tax credits, will still be able get them when they file their tax returns next year, officials said. Nearly 15 million people who are now uninsured will be eligible for premium assistance, and on average premiums for ACA health plans will decrease by about $50 per person per month, the officials said Friday in a call with reporters.

In addition, many of the 9 million Americans who currently have ACA plans will benefit from those savings, the officials said.

People who sign up for coverage after April 1 will automatically receive the enhanced subsidies. Those already signed up can choose to come in after April 1 and update their application to immediately obtain the savings. They can keep their current ACA plan or they can use enhanced subsidies to buy a free plan, if available, or a plan that provides more coverage.

Broad Outreach Effort

The Biden administration is planning a broad outreach effort to coincide with the arrival of the new subsidies. It’s a reversal from the Trump White House. The Trump administration unsuccessfully attempted to repeal the Affordable Care Act and then administered the exchanges with little fanfare while promoting less-regulated alternatives.

Renewed focus on enrollment in the ACA is likely to bolster health insurers like Centene Corp. and Molina Healthcare Inc. that specialize in the plans. It could also reignite longstanding political divisions over the law, the signature domestic achievement of Barack Obama and one of the most controversial pieces of legislation passed in recent memory.

The ACA gained popularity when Republicans attempted to undo it. The American Rescue Plan makes changes to the law intended to blunt some of the edges that made it unpalatable to some Americans, especially middle-class families who made too much to get subsidies yet still faced health-care premiums they struggled to afford.

Instead of cutting off subsidies with a cliff once people’s incomes reach the threshold of four times the poverty level, no recipient will pay more than 8.5% of income for ACA health plans under the new structure.

It will also boost assistance for those toward the bottom of the scale. About 1.8 million people who are currently uninsured and who make less than 150% of the poverty level—or about $40,000 for a family of four—will be eligible for plans with zero premium costs, Biden officials project. A family making $90,000 would see premiums decrease by an additional $200 per month.

©2021 Bloomberg L.P.

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