We will for the first time witness the power of a fully functional Affordable Care Act (ACA).
The American bailout plan has challenged 3.7 million more people for the ACA’s premium subsidies. The Biden administration opened enrollment as soon as they took office, and 200,000 Americans enrolled in the first two weeks. The administration is now extending enrollment until August 15, supported by advertising in the millions.
Insurers are expanding into new markets, and some that long ago abandoned them in the early years of the law are now re-entering. The individual mandate is gone, but it turns out it may not be as important to the long-term sustainability of the law as originally thought. The law had been weakened since it was passed by the Supreme Court and the Republican opposition. So this is kind of a fresh start.
“The ACA is much closer to what its proponents hoped for right now,” said Larry Levitt, executive vice president of the Kaiser Family Foundation (KFF). “This is a real test of how effective a juiced ACA can be in bringing us closer to universal coverage.
Taken together, on Labor Day, the country should have the clearest idea yet of how the ACA works at full strength – and where there are still gaps in the U.S. healthcare system.
A major contribution is the American rescue plan, which lifted the eligibility limit for premium subsidies. Before the ARP, people who hit more than 400 percent of the federal poverty line (about $ 51,500 for an individual or $ 106,000 for a family of four) could not receive government assistance. The new law removed this limit so that no one pays more than 8.5 percent of their income for their health insurance.
The Kaiser Family Foundation released new estimates of how the law would affect health insurance, noting that changes will make a particularly big difference for people who make just a little too much money to qualify, and although in the range of 400 to 600 percent. Around 2.4 million people in this income bracket are eligible for subsidies. Many people who make more money may already be paying 8.5 percent of their income or less for insurance, no matter how expensive, but around 1 million more people on those higher incomes are now eligible for assistance.
In diagram form, the difference between the pre- and post-ARP version of the ACA is best represented by the green bars on the right. These are the newly authorized persons.
Kaiser Family Foundation
Not only does the American bailout plan make more people eligible, but the law also increases the amount of subsidies people receive. The light blue bar in the table below shows how much the new grant adds to a person’s premiums.
Kaiser Family Foundation
Millions of people are now eligible for subsidies and millions more are now eligible for more generous subsidies. According to Kaiser estimates, the majority of the 29 million uninsured people in the US are already eligible for ACA subsidies or Medicaid.
Kaiser Family Foundation
But obviously they haven’t signed up. This is actually a long-standing problem: millions of people are entitled to medical assistance but for some reason they are not using it. (According to surveys, many of these people don’t know they qualify for help.)
This is where Biden’s extended registration period and advertising flash come into play. Shortly after taking office, Biden announced a special ACA enrollment period from February 15 to May 15. Last week the administration announced that it would extend this enrollment deadline to August 15, giving you five months to try and reach as many of that 29 million as possible. A $ 50 million advertising campaign (more to come) should help.
The Biden administration is spending a lot of time and money trying to cover more Americans. It could also be the best way to expand coverage during Biden’s presidency when a public option can’t pass the Senate. (You would also have to make the new ARP subsidies, which are currently scheduled to expire in two years, permanent at some point.)
It will not be easy. The remaining uninsured are uninsured for one reason: They are generally less tied to the institutions and communities they may associate with health insurance.
But the renewed optimism about the ACA is real. Look no further than the health insurers themselves. Reports indicate that Cigna plans to double the number of markets in which ACA plans are sold next year. UnitedHealth is the country’s largest insurer, but the company pulled out of most ACA markets in 2016. Now it is considering a return. It makes sense: As KFF’s Cynthia Cox told me, the ACA market for health insurers is now almost as profitable as the high-margin Medicare Advantage market.
Some uninsured people will not be insured anytime soon. Democrats tried to get more states to expand Medicaid through ARPA, and while Republicans in Alabama and Wyoming appear to be receptive to its offer, the largest non-expanding states don’t seem to be wavering. About two million Americans living in poverty will be left without cover. The nearly 4 million people currently ineligible for assistance due to their citizenship status are also not being supported by the ARP or Biden advertising campaign.
The US healthcare system will still be in need of repair this fall. Meanwhile, Biden is giving a newly improved version of Obamacare the chance to stretch as far as possible.