The Affordable Care Act has now turned 12 — and despite years of determined Republican opposition, the law they dubbed Obamacare is on increasingly firm ground. Designed to increase the number of Americans covered by health insurance and to improve the quality of that insurance, that’s just what the law has done. A record number of people, some 13.6 million, have signed up for health coverage for 2022 on the insurance exchanges set up under the 2010 law. About 92 percent of those purchasers will receive tax credits to help them afford their plans.
That success shows, in part, the importance of a concerted effort to make the complicated law work. The Biden administration has expanded public-information ads about the ACA, bolstered efforts to help people navigate the law, extended the regular open enrollment period, and offered a special pandemic enrollment opportunity. The administration has also reversed the Trump administration’s approval of state work requirements, which were a way of keeping otherwise qualified people from using the ACA’s expanded Medicaid coverage.
Further, the Biden team is about to issue a rule that will increase the number of families who can acquire tax-credit-subsidized care by fixing what’s known as the “family glitch.” Under the ACA, if a person has access to affordable health coverage offered by his or her employer, he or she can’t decline that coverage in favor of using the ACA exchanges. The threshold for judging affordability is that an individual’s premiums for such a plan must not consume more than 9.6 percent of total household income.
The way the law has been interpreted, that’s so even if the would-be purchaser is trying to buy a family plan and the employer-offered family plans are excessively expensive.
That counterintuitive interpretation emanated from the IRS during the Obama years. The administration is finalizing a new regulation more in keeping with the intent of the law. To wit, that if an employer-offered family plan is deemed too costly, an individual can qualify to buy one on the insurance exchanges, even if the workplace-offered individual plan meets the affordability ceiling.
That seemingly small change would open affordable coverage to millions more. According to the Kaiser Family Foundation, a nonprofit with deep health care expertise, another 5.1 million individuals would receive affordable coverage, most of them children or women. Kaiser estimates that some 4.4 million, or about 85 percent, of that group are currently covered, but under plans that cost the purchaser more than 10 percent of his or her income. According to the foundation’s estimates, more than 100,000 Massachusetts residents fall into that gap.
There is, however, much more that could be done to bolster the ACA. One such action would be to make permanent, or pass a longer-term extension of, the enhanced ACA tax-credit subsidies provided on a temporary basis as part of the American Rescue Plan, the administration’s major pandemic relief effort. That extra help expires at the end of this year. Democrats had hoped to extend those subsidies through their Build Back Better legislation, but that bill is currently stalled in the Senate.
The cost there isn’t insignificant, but neither is it staggering. The nonpartisan Congressional Budget Office has estimated the expense of keeping the higher subsidies at $22 billion a year. For another $18 billion annually, we could close the coverage gap in the 12 states that haven’t chosen to offer expanded Medicaid, as authorized and largely paid for by the ACA.
“There is no opposition among Democrats over the idea of extending the extra ACA premium help,” noted Larry Levitt, executive vice president for health policy at Kaiser. “If there is a legislative train this year, the extended ACA subsidies will be on it.”
Those added subsidies have made a significant difference for consumers. Kaiser previously estimated the average savings at about $70 per month for those who buy coverage on the exchanges. The Biden administration’s more recent comparable estimate is $59.
Because that change is budget-reconciliation eligible, it can pass with 51 Senate votes, which means Democrats command the numbers to do it themselves.
The problem: If the fractious party can’t come together on some sort of domestic agenda, there won’t be a vehicle for those subsidies to pass. That’s all the more reason for the party’s moderate and progressive wings to come together around a domestic package that can pass.
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