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Next steps in expanding coverage and affordability after the Inflation Reduction Act
Next steps in expanding coverage and affordability after the Inflation Reduction Act
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Urban Institute research report
- Author(s):
- Holahan, John, author
Simpson, Michael, (Of Urban Institute), author - Contributor(s):
- Commonwealth Fund, issuing body.
Health Policy Center (Urban Institute), issuing body.
Urban Institute, issuing body. - Publication:
- Washington, DC : Urban Institute, September 2022
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Health Equity -- economics
Health Policy
Insurance, Health -- economics
Insurance, Health -- legislation & jurisprudence
United States - Genre(s):
- Technical Report
- Abstract:
- The Build Back Better Act contained several policies to increase health insurance coverage rates and improve the affordability of coverage. The Build Back Better Act did not become law, but the Inflation Reduction Act (IRA), signed into law on August 16, 2022, included the provision extending the enhanced subsidies (premium tax credits) from the American Rescue Plan Act (ARPA). However, the IRA excluded many other health provisions proposed in the Build Back Better Act. Among the excluded provisions are some policies we examine here as potential reforms to further increase coverage rates and affordability: filling the Medicaid gap by allowing people who would be eligible for Medicaid, but are not because they live in states that have not expanded Medicaid, to gain coverage through the Affordable Care Act (ACA) Marketplaces, establishing a $10 billion federal reinsurance fund, and reducing the affordability threshold for employer coverage to 8.5 percent of income. We also examine two other policies not in the Build Back Better Act or the IRA that are plausible next steps to improve affordability, coverage, and interstate equity. The first is increasing the federal Medicaid matching rate for ACA expansion beneficiaries to 100 percent. This would make the federal matching rate in expansion states the same as the full federal financing of Marketplace coverage when filling the Medicaid gap in states that have not expanded Medicaid. The second is making cost-sharing subsidies more generous at each income level, including by tying premium subsidies to the gold metal tier (table 1). The policy change enacted in the IRA, the extension of ARPA subsidies for three years, will dramatically improve the affordability of health insurance premiums, as shown in table 1. With the ARPA subsidies extended, people with incomes below 150 percent of the federal poverty level (FPL) will not face premiums. In addition, the premiums people with incomes between 150 and 400 percent of FPL will be expected to pay will be considerably reduced relative to pre-ARPA levels. No one eligible for Marketplace subsidies will pay more than 8.5 percent of their income for nongroup health insurance premiums, including people with incomes above 400 percent of FPL. This policy is our baseline for further reforms.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-DC license. (More information)
- Extent:
- 1 online resource (1 PDF file (iv, 25 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918503477706676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918503477706676