A major premise of the Affordable Care Act (ACA) was that Americans who need to buy their coverage within the individual market will be able to obtain coverage – no matter their health background – which the payments should be affordable.
The rules to facilitate those goals will be in spot for several years now. And even though they have worked quite well for some Americans, there have been others for whom ACA-compliant health coverage was still unaffordable.
But the American Rescue Plan, enacted earlier this year, has boosted the ACA's subsidies, making truly affordable coverage a lot more available of computer used to be.
The numbers speak on their own: Exchange enrollment has likely reached a record high of nearly 13 million individuals 2022, after a lot more than 2.5 million people enrolled during the COVID/American Rescue Plan enrollment window, which ended this month in many states.
How much are consumers conserving medical health insurance premiums?
And the total amount that individuals are paying for their coverage and care is a reasonably bit lower than it was before the APR's subsidy enhancements. We can see this across the states that use the federally run exchange (HealthCare.gov), as well as the states running their own exchanges:
- Among those who enrolled throughout the recent special enrollment period in the 36 states which use HealthCare.gov, average after-subsidy premiums were 27% lower than the amounts people were paying pre-ARP.
- Among HealthCare.gov enrollees who signed up during the special enrollment period or who updated their enrollments to assert the enhanced subsidies, 35% are now paying less than $10/month for his or her coverage.
- Average deductibles for new HealthCare.gov enrollees were 90% lower than pre-ARP deductibles, likely driven mainly by the number of people who were in a position to enroll in free or low-cost Silver plans with built-in cost-sharing reductions. (This includes people receiving unemployment compensation in 2022, as well as individuals who aren't eligible for Medicaid and whose household earnings are between 100% and 150% of the federal poverty level.)
- The state-run exchange in Washington reported that 78% of their enrollees are now receiving premium subsidies, versus 61% before the ARP was implemented. And consumers with income above 400% from the poverty level, who were not entitled to subsidies pre-ARP, are now paying an average of $200 less in premiums each month. Washington's exchange also noted that 15% of their enrollees are actually paying $1/month or less for his or her coverage, versus only 5% whose premiums were that low pre-ARP.
- The state-run exchange in California reported that customers with household incomes between 400% and 600% of the poverty level are saving an average of almost $800/month on their own premiums. (That's an individual with income as much as about $76,000, or perhaps a household of four with an income as much as about $157,000.)
- The state-run exchange in Nevada reported that people who enrolled or updated their account because the ARP was implemented are paying an average of $154/month in after-subsidy premiums, whereas the after after-subsidy premium at the end of last winter's open enrollment period (pre-ARP) was $232/month.
- Maryland's state-run exchange reported a 12% increase in the number of enrollees receiving subsidies; a lot more than 80% of Maryland's current exchange enrollees are subsidy-eligible.
These examples highlight the improved affordability that the ARP has taken to the medical health insurance marketplaces. People who were already entitled to subsidies are now eligible for larger subsidies. And many of those who were previously ineligible for subsidies – but potentially facing very unaffordable medical health insurance premiums – are benefiting from the ARP's elimination of the income cap for subsidy eligibility.
How long will the ARP's subsidy boost last?
Although the ARP's subsidies for people receiving unemployment compensation in 2022 are only available until the end of the year, all of those other ARP's premium subsidy enhancements will still be available throughout 2022 – and maybe longer, if Congress extends them.
Use our updated subsidy calculator to estimate how much you can save money on your 2022 medical health insurance premiums.
This means that the affordability gains we've seen this year is going to be available during the upcoming open enrollment period, when people compare their plan options for 2022.
Robust ACA-compliant coverage will still be a more realistic option for more people, reducing the need for alternative coverage options such as short-term plans, fixed indemnity plans, and health care sharing ministry plans.
Even catastrophic plans – which are ACA-compliant although not compatible with premium subsidies – will probably see reduced enrollment over the the coming year, since more and more people qualify for enhanced subsidies which make metal-level plans more affordable.
Can everyone find affordable medical health insurance now?
Unfortunately, not yet. There are still affordability challenges facing some Americans who require to obtain their own coverage of health. Which includes a lot more than two million people caught within the “coverage gap” in 11 states that have refused to grow eligibility for Medicaid, as well as about 5 million people affected by the ACA's “family glitch.”
There are strategies for avoiding the policy gap if you're in a state that hasn't expanded Medicaid, and Congressional lawmakers will also be considering the possibility of a federally-run health program to cover people in the coverage gap.
Families affected by the family glitch get access to an employer-sponsored plan that's affordable for that employee although not for the entire family – and yet the family can also be ineligible for subsidies within the marketplace/exchange. (It's possible that the Biden administration could tackle this issue administratively in future rulemaking.)
Have ARP's subsidy boosts been successful?
With the exception of these two obstacles, the ARP has succeeded in making affordable coverage of health a far more realistic choice for most Americans who need to obtain their own health coverage. We can see success within the record-high exchange enrollment, the elevated percentage of enrollees who're subsidy-eligible, and also the decrease in after-subsidy premiums that individuals are paying.
If you're currently uninsured or included in a non-ACA-compliant plan (including a grandfathered or grandmothered plan), it's to your advantage to take a minute to determine what your options are in the ACA-compliant market. Open enrollment for 2022 coverage starts in only 8 weeks, however, you may also find that you can still sign up for an agenda throughout 2022 if you live in a state in which a COVID/American Rescue Plan enrollment window is ongoing, or if you've experienced a qualifying event recently (these include loss of employer-sponsored insurance, marriage, or even the birth or adoption of a child).
Even if you shopped just last winter, during open enrollment for 2022 plans, you might be surprised at the main difference between your premiums you would have paid then and today. The ARP wasn't yet essentially over the past open enrollment period, if you weren't entitled to a subsidy last time you looked, or if the plans still seemed too expensive even with a subsidy, you'll want to check again this fall.
The subsidies for 2022 will still be larger and more widely available than they've been previously, and you owe it to you to ultimately see what's available in your neighborhood.
