Unless Congress acts soon, federal subsidies that help millions of people in the United States afford private health insurance purchased through a government-operated marketplace will expire at the end of this year. Congressional leadership should heed their colleagues’ alarms and use the budget reconciliation process to extend these subsidies before it’s too late. In late 2021, nearly one-third of US households did not have enough savings to cover an unexpected $400 expense. Since then, price inflation has only increased the cost of many basic goods like food, fuel, rent, and energy. But without congressional action, a large increase in healthcare costs also looms on the horizon.
The 2021 American Rescue Plan Act (ARPA) changed the system of subsidies for private health insurance plans purchased by low- and middle-income earners through the Affordable Care Act’s government-operated marketplaces.
These subsidies corrected longstanding policy gaps, fully covering premiums for people earning near-poverty wages and capping premium costs for certain standard plans at 8.5 percent of income. Currently, 28 percent of the more than 14 million people enrolled through one of these plans pay less than $10 in monthly premiums because of this program. But these subsidies will expire on January 1, 2023. A recent study by Families USA calculated the cost of rolling back these subsidies, using data from the 10.3 million people that bought insurance through the federally operated marketplace. On average, their premiums would increase by 53 percent, costing more than $700 over a year. In West Virginia, the average annual premium would increase by more than $1,500.
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