- With the scheduled recess of Congress at the end of July and health insurance markets finalizing their rates for the 2023 coverage year, timely action is critical in deciding the future of health insurance benefits. US rescue plan.
- The law, which provides more and expanded federal financial assistance and has helped millions of Americans get health insurance through the Affordable Care Act, is due to expire at the end of this year.
- An estimated 220,000 Californians could become uninsured, with premiums doubling for 1 million low-income consumers.
- Middle-income consumers would lose all federal financial assistanceand their premiums would rise by an average of $272 a month if Congress does not act to expand the law.
SACRAMENTO, Calif. — An updated analysis from Covered California highlights how the expiration of the U.S. Rescue Plan (ARP) would increase costs for enrollees, including doubling premiums on average for 1 million low-income Californians. income, and could lead to up to 220,000 people dropping out of their health coverage. The analysis comes as Congress deliberates whether to expand the law, which offers increased financial assistance and is due to expire at the end of this year.
“Financial assistance from the American Rescue Plan is a lifeline for millions of Americans, keeping health insurance more affordable and within reach,” said Jessica Altman, executive director of Covered California. “Millions of Americans are counting on Congress because the reduction in financial assistance provided by law means that many families will face the difficult choice of becoming uninsured and rolling the dice if they are injured or ill. “
Covered California’s analysis – “Americans brace for higher health insurance costs if US bailout is allowed to expire” – shows how Californians could be affected if Congress chooses not to act. ARP reduced the monthly premium paid by covered California consumers by 20% from 2021 to 2022, enrollments hit a record high of 1.8 million, and 92% of consumers were eligible to receive financial assistance. Nationally, monthly premiums fell 23% and registrations reached 14.5 million people.
“The US bailout has reduced premiums and increased enrollment among all income brackets and ethnic groups,” Altman said. “Without federal action to extend these policies through 2023 and beyond, the gains we have made as a state and as a country will be at risk.”
Californians face higher costs if ARP is allowed to expire
Covered California’s analysis found that if the federal subsidies provided by the ARP expired, enrollees who annually earn less than 400% of the federal poverty level ($52,000 for a single person and $106,000 for a family of four people) would see their monthly costs increase by an average of $70 per month (71%).
The analysis also found that Californians who could least afford the increase — those earning between $17,775 and $32,200 a year for an individual and $36,570 to $66,250 for a family of four people – would be the most affected, with their health insurance costs more than doubling. A total of 1 million covered California consumers fall into this income bracket, or 250% of the federal poverty level or less (see Figure 1: Potential premium increases for covered California subsidized enrollees earning less than 400% of the poverty line). federal poverty in 2023).
In addition to the analysis, Covered California also provides data describing the impact of the ARP expiration in California’s 53 congressional districts, which can be found here. The data is broken down by income brackets and shows how Californians across the state could be affected.
Expiring ARP subsidies would also mean the return of the so-called “subsidy cliff,” which means middle-income consumers — individuals who earn more than $51,520 a year and families of four who earn more $106,000 a year – wouldn’t. be eligible for any federal financial assistance. In California, these middle-income consumers would see their costs increase by an average of $272 per month (see Figure 2: Potential premium increases for covered subsidized enrollees in California earning more than 400% of the federal poverty level in 2023).
“The US bailout builds on the Affordable Care Act and has enabled more people than ever before to get the protection and peace of mind that quality health care coverage provides,” Altman said. “Whether you’re one of Covered California’s record 1.8 million consumers or get your coverage directly from a health insurance company, you’ll pay more next year if these subsidies aren’t extended. “
Figure 1: Potential premium increases for covered California subsidized enrollees earning less than 400% of the federal poverty level in 2023
Figure 2: Potential Premium Increases for Covered California Subsidized Enrollees Earning More Than 400% of the Federal Poverty Level in 20231
Hundreds of thousands of Californians could lose their coverage
An estimated 3 million Americans would lose their health insurance coverage if US bailout benefits were allowed to expireincluding 220,000 Californians.
Removing increased subsidies would also disproportionately impact communities of color in California, whose enrollments have increased dramatically during the pandemic.
Many people may also try to stay insured by switching to less comprehensive coverage, with higher deductibles and lower monthly premiums. In doing so, consumers could expose themselves to higher out-of-pocket costs that could delay or prevent their access to care.
The analysis provides concrete examples of premium increases that go beyond the averages for the lived experiences of consumers who differ in age, family size, income and location.
The importance for Congress to act as soon as possible
Covered California will announce preliminary pricing for its health plan for the 2023 coverage year on July 19. The pricing changes are affected by uncertainty surrounding the future of PRA and the potential impact on enrollments that it could have if federal grants are not extended.
To avoid disruption to the upcoming renewal period in October and the start of open registration in November, congressional action must take place immediately.
“Covered California is ready to move mountains if Congress decides to extend US bailout grants, but every day counts,” Altman said. “The longer we go without a decision, the more difficult it will be to implement a new subsidy structure and avoid consumer confusion.”
About California Covered
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place eligible people can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the one that best suits their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.
Covered California is an independent part of the state government whose job it is to make the health insurance market work for California consumers. It is overseen by a five-member board appointed by the governor and the legislature. For more information about Covered California, please visit www.CoveredCA.com. ASPE. “Projected Coverage and Subsidy Impacts if the American Rescue plan’s Marketplace Provisions Sunset in 2023”, May 23, 2022. https://aspe.hhs.gov/sites/default/files/documents/1647ad29528ee85a48d6ffa9e7bfbc8f/arp-ptc-sunset-impacts – 03-22-22%20Final.pdf  UC Berkeley Labor Center. “Threat to Coverage and Affordability Gains Covered California if Congress Doesn’t Renew Subsidy Enhancements.” April 14, 2022. https://laborcenter.berkeley.edu/the-threat-to-coverage-and-affordability-gains-in-covered-california/.