Just before Thanksgiving, home of Representatives passed the Build Back Better Act (HR5376) and sent it to the Senate. The version the House approved was scaled down from the initial proposal, but it is still a strong bill that will create jobs, protect environmental surroundings, help families meet their needs, and improve use of healthcare.
Lawmakers had initially hoped the bill would be enacted before Christmas. However the situation is different in December, with West Virginia Senator Joe Manchin stating recently he won't prefer the current Build Back Better legislation. Everything is still in flux, and it is noteworthy the nation's largest coal miners union has asked Manchin to reconsider his position.
For now, we don't know what might come of the. Manchin might reconsider, or even the legislation might be changed to support his earlier requests, or it may be scrapped altogether and substituted for various piecemeal bills.
But for the time being, we wanted to let you know that the House's version of the Build Back Better Act would affect your wellbeing insurance in 2022 and future years. We'll also clarify what you can already rely on in 2022, even without the Build Back Better Act. And just how should you handle the present open enrollment period, given that the legislation is still in the air?
Let's start with a summary of how the House's version of the BBBA would affect people who buy their insurance (bearing in mind that we don't know if the Senate will pass any form of the BBBA, and when they do, what changes may be incorporated):
Law would extend larger and much more widely available subsidies
The enhanced premium tax credit (subsidy) structure developed by the American Rescue Plan (ARP) would remain in place through 2025, instead of ending after 2022. This indicates:
- There would continue being no “subsidy cliff” through 2025. Subsidies would be open to households earning a lot more than 400% from the poverty level, as long as the cost of the benchmark plan would certainly be more than 8.5% of household income.
- Subsidies would continue being larger than these were before the ARP. Individuals with household income up to 150% of the poverty level would be able to enroll in the benchmark plan at no cost. And people with income above that much cla would still pay a smaller percentage of their income for that benchmark plan, relative to the things they had to pay pre-ARP.
These enhanced subsidies have made coverage a lot more affordable in 2022, and the BBBA would extend them for another three years.
It's important too to note that HHS finalized a brand new rule this year that enables year-round enrollment via HealthCare.gov for individuals whose income doesn't exceed 150% of the poverty level. This rule remains in place provided people at this income level are eligible for $0 premium benchmark plans. Underneath the ARP, that would just be through 2022. But the BBBA would extend the supply of this special enrollment opportunity through 2025.
BBBA would include one-year extension of unemployment-related subsidies
The ARP's subsidies related to unemployment compensation could be obtainable in 2022, instead of ending after this year. The Congressional Budget Office (CBO) projects that about a million individuals will receive these enhanced subsidies, and that about half of them would certainly be uninsured in 2022.
Under the ARP, if an individual receives unemployment compensation at any point in 2022, any income above 133% of the poverty level is disregarded once they obtain a marketplace plan. Which means they're eligible for a $0 benchmark plan and full cost-sharing reductions (CSR).
The BBBA would set the wages disregard threshold at 150% of FPL for an individual who receives unemployment compensation in 2022. However the effect will be the same, as applicants at this income are eligible for $0 benchmark plans and full CSR. As noted above, gleam year-round enrollment chance of people whose income doesn't exceed 150% from the poverty level (that's available in most states that use HealthCare.gov; state-run marketplaces can choose if you should offer it).
As is the situation underneath the ARP, the unemployment-related subsidies could be available for the whole year when the person receives unemployment compensation for at least 1 week of the season. But because can also be the situation under the ARP, the marketplace subsidies wouldn't be readily available for any month the individual is eligible for Medicare or an employer-sponsored plan that's considered affordable and provides minimum value.
Law would close Medicaid coverage gap for 2022-2025
In 11 states which have refused to grow Medicaid underneath the Affordable Care Act, there's a coverage gap for individuals whose income is under the poverty level. As of 2022, there were a lot more than 2.2 million people caught in this coverage gap (mostly in Texas, Florida, Georgia, and North Carolina). They're ineligible for Medicaid as well as ineligible for premium subsidies available on the market.
The BBBA would close the coverage gap for 2022 through 2025. The current rules (which only allow marketplace premium subsidies if an applicant's earnings are a minimum of 100% from the poverty level) could be changed to permit premium subsidies it doesn't matter how low an individual's earnings are.
This would be applicable nationwide, but subsidies would continue being unavailable if a person is eligible for Medicaid. So in many states, subsidies would continue being available just for applicants with income above 138% of the poverty level, as Medicaid can be obtained below that much cla in the 38 states that have expanded Medicaid under the ACA.
In 2022, individuals who would certainly be in the policy gap could be entitled to $0 benchmark plans and full cost-sharing reductions (CSR). In 2023 through 2025, they'd continue to be entitled to $0 benchmark plans, and their cost-sharing reductions would be robust. Instead of covering 94% of costs for an average standard population (which is currently the best degree of CSR), their plans would cover 99% of a standard population's costs.
The CBO projects the BBBA's subsidy enhancements would increase the number of individuals with subsidized marketplace coverage by about 3.6 million. Many of those individuals would otherwise maintain the coverage gap and uninsured.
Nothing would change about Medicaid eligibility or subsidy eligibility in the states which have expanded Medicaid. However the BBBA provides additional federal funding for Medicaid expansion in those states for 2023 through 2025. Currently, the us government pays 90% of the price of Medicaid expansion, which would grow to 93% for those three years.
Build Back Better Act would improve insulin coverage
The BBBA would require individual and group health plans to cover certain insulins before the deductible is met, starting in 2023. Enrollees would don't pay a lot more than $35 for a 30-day supply of insulin (or 25% from the price of the insulin, if that is a smaller amount).
This requirement would apply to catastrophic plans as well as metal-level plans. And although HSA-qualified high-deductible health plans are often excluded from new coverage mandates, that will 't be the case here. In 2022, the IRS implemented new rules that allow HSA-qualified plans to cover, on a pre-deductible basis, some types of care aimed at controlling chronic conditions; insulin is among them.
Law would reset affordability rules for employer-sponsored coverage
Under ACA rules, a person cannot get premium subsidies in the marketplace should they have use of an employer-sponsored plan that provides minimum value and is considered affordable.
Under current rules, an employer-sponsored plan could be considered affordable in 2022 if the employee's cost for employee-only coverage isn't more than 9.61% of the employee's household income. Underneath the BBBA, this threshold could be reset to eight.5% of household income for 2022 through 2025.
For some employees, this would make marketplace subsidies newly available. And for others, employers might opt to cover much more of their premium costs, making their employer-sponsored coverage more affordable. However, many employers might simply stop offering employer-sponsored coverage altogether, even though they would potentially be subject to the ACA's employer mandate penalty should they have 50 or even more employees (if an employer stops offering coverage, the workers can enroll in a marketplace plan with income-based subsidies).
It's worth noting the BBBA wouldn't address the household glitch. So the members of the family of employees who have a deal of affordable self-only coverage would continue to be ineligible for marketplace subsidies should they have access to the employer-sponsored plan, regardless of the cost. But prominent health law scholars have opined that the Biden administration could fix the family glitch administratively, without legislation. There is some cause to hope the administration may do so.
BBA would make changes to MAGI calculation
The ACA features its own meaning of modified adjusted gross income (MAGI), used to determine eligibility for premium tax credits and cost-sharing reductions (a very similar version of MAGI can be used to determine eligibility for CHIP, Medicaid expansion, and Medicaid for children and pregnant women).
The BBBA would make a few changes to the way MAGI is calculated whenever a tax dependent has income or even the household gets to be a lump sum payment from Social Security:
- Through 2026, the first $3,500 in income earned by dependents will not have to be added to the family's household income.
- From 2022 onward, lump sum payment Social Security payments due to prior years would not have to be part of a person's MAGI. The median processing here we are at a Social Security disability appeal is more than a year, so it's common for people to hold back a long time after which suddenly receive several months of Social Security payments at one time. This could sometimes lead to them having to repay premium tax credits for the year in which they receive the lump sum payment. The BBBA would prevent that in future years.
What does this mean for the current open enrollment period?
Given that the legislation continues to be up in the environment, this is what you have to bear in mind when enrolling in coverage for 2022:
General subsidies
- There isn't any set income cap for marketplace subsidies in 2022. That provision is already in place, and doesn't depend on the BBBA. (Eligibility for a subsidy does rely on your earnings, but that eligibility now extends above 400% from the poverty level in most places, depending on how old you are.)
- The better quality subsidy structure that the ARP introduced this year will still be essentially in 2022, whether or not the BBBA is enacted.
- Subsidies are much larger and much more accessible compared to what they were last fall. And many from the ARP's subsidy enhancements were already slated to carry on through 2022. This means most enrollees can sign up now and rest assured that their 2022 coverage options and subsidy amounts will not change assuming the BBBA is enacted.
Unemployment-related subsidies
- If you received unemployment compensation in 2022 and got the ARP's unemployment-related subsidies, you might find that your after-subsidy premium is currently slated to improve significantly for 2022, due to the expiration of the unemployment-based subsidies.
- If you are always going to be receiving unemployment compensation after the oncoming of 2022, you might end up qualifying for an additional round of robust subsidies in 2022. But that relies on the BBBA. For the time being, the applying will just ask for your projected income, which will have to include the amount that you expect to earn in 2022. That may create a substantial subsidy or not, depending on your household's specific details.
- The proven fact that open enrollment continues through at least January 15 in most states may be used to your benefit. For the time being, you can enroll in the program that best fits your budget based on the existing subsidy rules for 2022. (In certain states, you still have time for you to sign up for coverage that starts January 1, although most states are now enrolling people in plans with February effective dates.) If the BBBA is enacted in early January, you would then are able to pick a different plan before the end from the open enrollment period. It would have a February effective date (or March, depending on the state) as well as your out-of-pocket costs would reset to $0 on the new plan. However for many people, this is the chance to upgrade from a Bronze plan to a Silver plan, therefore it is worth considering being an option if you know that you'll be receiving unemployment compensation after the start of 2022.
- If the BBBA isn't enacted by mid-January, you need to still keep an eye on this. Another form of the balance, or smaller piecemeal versions, may be enacted later in 2022. If that happens and unemployment-based subsidies are included in the final legislation, you might become entitled to new subsidies at that time. That could or might not have a special enrollment period to allow people receiving unemployment compensation to switch plans. For now, it's all in the air, but the situation could alternation in 2022.
Learn how you might avoid the coverage gap
If you have a low income, have been in a state that hasn't expanded Medicaid, and also the marketplace is showing that you aren't eligible for any premium tax credits, you'll want to look at this article about methods to avoid the coverage gap.
Assuming you cannot get out of the coverage gap for the moment, you'll want to have a close eye on the BBBA. Whether it's enacted with similar coverage gap provisions the House approved, you might be entitled to full premium tax credits as of early 2022. And you'd have a chance to enroll in coverage at that point.
Louise Norris is definitely an individual health insurance broker that has been writing about health insurance health reform since 2006. She has written a large number of opinions and academic pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform by other medical health insurance experts.
