The ACA's 2025, projected

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Project 2025ifying the ACA

On February 10, KFF (f.k.a. the Kaiser Family Foundation) hosted a webinar on the fate of the ACA under Republican rule (read the transcript). Moderated by Larry Levitt, who oversees all research at KFF — probably the chief nongovernmental source of data on U.S. healthcare coverage and usage — the discussion featured Cynthia Cox, director of KFF’s ACA-related research; Sarah Lueck, VP for Health Policy at the Center on Budget and Policy Priorities; and Brian Blase, president of the Paragon Institute, a conservative think tank, and former special assistant to Trump at the White House’s National Economic Counsel.

Blase is noteworthy as an inveterate enemy of the ACA marketplace, ACA Medicaid expansion, and really Medicaid generally, which he would shrink radically, as Republicans in Congress are now proposing. His Paragon Institute has put out position papers recommending that the enhanced premium subsidies enacted in 2021 in the American Rescue Plan Act (ARPA), which are funded only through 2025, not be extended, and that the federal funding mechanism for the ACA Medicaid expansion — a 90% federal match rate (or FMAP) — be phased out over ten years, along with further cutting the FMAP for “wealthy” states. The 90% FMAP phase-out appears to be envisioned in the Republican House budget resolution released this week.

Blase provides an ideological basis for Republicans to refuse to extend the ARPA subsidies — and in so doing, wields a political cudgel against Republican reps who would prefer not to uninsure tens of thousands of their constituents by letting the enhanced subsidies expire. So what he says is worth listening to for its likely practical effect.

Blase’s case against extending the ARPA subsidy increases is based mainly on allegations of pervasive fraud in ACA applications. These allegations, as Cox and Lueck acknowledged, have a basis in truth, as agent-induced fraud increased rapidly in 2023 and 2024. But as Lueck suggested, Blase exaggerates the extent of fraud and would needlessly disenroll millions to combat it. I responded to his arguments in detail in this post and added a TLDR in this one, pasted as a noted below.

What stood out to me in the roundtable was Blase’s concessions to those aiming to salvage as much of the marketplace status quo as possible under Trump. Those concessions reflect Trump’s grudging intimations in the campaign that he was not looking to repeal the ACA, which in public perception means the ACA marketplace — though Republicans are apparently aiming again to defund the ACA Medicaid expansion, which was always the submerged core issue. (Larry Levitt kept this discussion away from Medicaid.)

Here were the noteworthy concessions, if that is the right word:

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No abolition: While Blase wants to stand up an ACA-noncompliant market as the Trump administration did in 2018 — that is, a market of medically underwritten plans not required to cover Essential Health Benefits or provide an out-of-pocket limit — he acknowledges that eradicating the ACA marketplace is not on the table. Below, he complains about the year-round enrollment for people with income below 150% FPL implemented by the Biden administration in early 2022. In that context, he concedes (my emphasis):

If you're going to have guaranteed issue and community rating... And I think we have decided that there's a political consensus to have a market that has guaranteed issue and community rating... You need to have an open enrollment period, otherwise you're going to have severe adverse selection forces that come in and disrupt that market.

The counterargument here is that year-round enrollment is appropriate at low incomes, where people’s situations change frequently and awareness about available programs is low. Medicaid enrollment is year-round, and the income bracket in which year-round enrollment is currently available in the marketplace is capped at a level — 150% FPL — only slightly above the ACA’s Medicaid eligibility level, 138% FPL (inoperative in nonexpansion states, where most marketplace enrollment below 150% FPL occurs). Moreover, year-round enrollment at 100-150% FPL has probably had an effect opposite to adverse selection, in that much of it is driven by year-round agent/broker marketing (some of it fraudulent), which is finding people who otherwise would not have enrolled and giving them something for free with relatively little friction.

But I digress. The point worth noting here is the alleged political consensus to more or less leave the ACA marketplace standing as it was pre-ARPA — albeit probably adulterated and confused by a more robust ACA-noncompliant parallel market than the one Trump 1.0 managed to stand up.

Preserving part of ARPA: Blase voices the conservative chestnut that people who get zero-premium health coverage (e.g., 79 million Americans on Medicaid?) don’t value it. (Lueck countered by citing positive feedback from low-income enrollees, and Cox alluded to usage data showing that they are getting needed care.) Blase regards the ARPA subsidy boosts at the low end of the income spectrum as wasteful — notwithstanding (or because) the ARPA subsidy boosts drove enrollment at the 100-150% FPL income level from 3.9 million in 2021 to 9.4 million in 2024,* with most of those gains coming in states that have refused to expand Medicaid. He alleges widespread fraud in the income estimates of people whose applications put them in this income bracket, untroubled by the fact that the 6-odd million enrollees who claim income in the 100-138% FPL range in the ten states that have not expanded Medicaid would be in Medicaid if their states accepted the expansion (which he also regards as wasteful spending).

On the other hand, the smaller contingent of those who gained coverage because ARPA removed the income cap on subsidy eligibility — about 1.5 million** — do gain his sympathy and willingness to help.

Cynthia Cox recounted that the pre-ARPA subsidy cliff did hurt a significant number of modestly affluent people, and that their predicament was a political cudgel against the law (as well as a genuine failure to live up to its promise of affordable coverage for all):

So this was a really vocal group. It's a relatively small number of people, but it was a group that was arguably harmed by the Affordable Care Act. Especially if they were relatively healthy before, they might've gotten a lower premium. And then with the protections that were put in place with the ACA that required that people with pre-existing conditions be able to get coverage, premium increases were probably fairly common for this group, and they didn't get a subsidy to offset it. So this was a really sympathetic group, especially in 2016 [sic] when we were talking about repealing and replacing the Affordable Care Act. It was often that news coverage would focus in on a really sympathetic group like a family, maybe a small business owner or a farmer or an entrepreneur who didn't get coverage through their job but did have a fairly good income, but it just wasn't enough to afford full-price insurance.

Blase agrees that something should be done about the pre-ARPA subsidy cliff (my emphasis):

We should have unsubsidized options for upper/middle income people to choose. I do think if I was going to keep any portion of the enhanced subsidies, I would look at the area just above 400% of the poverty line, at least until there's some broader ACA reforms. Because in some parts of the country, premiums are really expensive and I think there would be an abrupt cut at 400% of the poverty line, and you could think about keeping a portion of those subsidies. That's not my preferred policy. My preferred policy is to eliminate the enhanced subsidies entirely and pursue regulatory changes to the ACA. But if Congress was looking to keep a portion of them, I think that is where they should focus.

So there you have it. Whether the Republican-controlled Congress does anything to improve the marketplace’s pre-ACA subsidy schedule depends on whether Republicans can pass any budget legislation without Democratic votes — and if not, how much leverage Democrats can muster and to what extent they’ll concentrate it on healthcare generally or the marketplace in particular. The other wildcard, as with anything related to the federal government now, is Musk, DOGE, Russell Vought, as the possibility of unconstitutional executive branch meddling with financing and programs currently in place or altered by the current Congress.

Revolutionary fascist interference of the DOGE variety aside, Blase, whose work is cited twice in the Project 2025 blueprint (and who appeared in this webinar sporting a 2025 sweatshirt or sweater), is a major ideological influence on Republican healthcare policy. His own blueprint for health coverage policy — leave the pre-ARPA ACA marketplace more or less in place, possibly provide some relief for some prospective enrollees with income above 400% FPL, stand up a medically-underwritten, lightly regulated parallel market, and defund the Medicaid expansion — probably represents mainstream Republican policy. It remains possible that Democrats will be able to salvage some or even all of the ARPA subsidy schedule, perhaps with a short-term extension, and — more importantly — fend off major Medicaid cuts. It’s also possible that DOGE will slash and burn the programs as established by law, or that the team assembled by RFK Jr. will catastrophically mismanage all programs. But the policy course outlined here is worth noting.

- - -

Here is my TLDR re Blase’s attack on the post-ARPA marketplace (again, from this post on Vance’s October remarks about Trump’s ACA plans :

Republican opponents of ARPA subsidy expansion are leaning heavily on a paper by Brian Blase, formerly a special assistant to Trump’s National Economic Counsel, alleging rampant overpayment of subsidies in the ACA marketplace. Blase does have a legitimate complaint in the recent explosion of unauthorized enrollment and plan-switching by unscrupulous ACA brokers. That fraud was stimulated in part by ARPA’s zeroing out of premiums for benchmark coverage for enrollees with income under 150% FPL (currently $21,870 for an individual), in combination with an administrative rule enacted in early 2022 that allows not only year-round enrollment to people below that threshold, but also a monthly Special Enrollment Period (SEP), enabling endless plan-switching. While I agree with Blase that that monthly SEP should be eliminated, and that CMS needs to act aggressively to quell broker fraud (as it appears to be doing), Blase attacks the subsidy enhancements with more dubious claims fraud in ACA enrollees’ income estimates — that is, raising or lowering income estimates to maximize subsidies (or access them at all). To those claims, I responded in detail here. The TLDR:

1) Most of the Post-ARPA enrollment increase in the ACA marketplace, as well as most of the increase at incomes where Blase alleges fraud is concentrated, is in states that have refused to enact the ACA Medicaid expansion, where most adults who estimate their incomes below 100% FPL get no government help at all. If substantial numbers of enrollees do in fact have incomes below 100% FPL, the solution is to…enact the ACA Medicaid expansion. People with income below 100% FPL should not be left with no access to affordable coverage.

2) ACA subsidies are based on an estimate of future income, which is inherently uncertain, especially for people at low incomes, who often work uncertain hours, change jobs, are self-employed, or depend on tips. Mismatches between income reported to the IRS and income projected in ACA applications probably have as much to do with inaccuracies in tax reporting as with inaccurate income projections in the ACA application. As for mismatches between income data based on ACA enrollment and data from the Census Bureau’s consumer surveys, those, like mismatches between IRS data and survey data, are perpetual.

3) Blase misreads CMS figures regarding former Medicaid enrollees, disenrolled in the post-pandemic “Medicaid unwinding,” who enrolled in the ACA marketplace in 2024. In HealthCare.gov states, according to CMS tracking, about a third of Medicaid disenrollees enrolled in the marketplace — not 70%, as Blase claims.

CMS needs to stop the broker fraud; should probably end the monthly SEP (though not year-round first-time enrollment for those with income under 150% FPL); and perhaps ramp up income checks on enrollees who may be underestimating their income (as opposed to overestimating it to get over the 100 % FPL threshold). Killing the ARPA subsidies to quell broker fraud would be throwing the baby out with the bathwater. But of course that baby — affordable insurance for those who lack access to affordable employer-sponsored health insurance — is a perpetual target for Republicans. And killing the ARPA subsidy boosts would further another core Republican goal — undermining the ACA’s protections for people with pre-existing conditions.

- - -

* In 2024, 6.9 million marketplace enrollees reported income in the 100-138% FPL range. In the broader 100-150% FPL category, 9,407,463 enrolled in 2024. The 100-138% FPL bracket was not reported in 2021, the last pre-ARPA year. From 2021 to 2024, enrollment in the 100-150% FPL bracket increased from 3.8 million to 9.4 million. That’s an increase of 5.5 million, more than half of the total increase of 9.4 million from 2021 to 2024. See the Marketplace OEP Public Use Files. To compare all-state totals at 100-150% FPL for 2021 and 2024 I excluded Idaho, which did not provide income breakouts to CMS in 2021.

** In 2024, 1.5 million on-exchange enrollees nationwide reported income above 400% FPL, which would have rendered them ineligible for subsidies pre-ARPA. Another 856,000 did not report income at all, most of whom probably knew they were ineligible for subsidies even with the post-ARPA 8.5%-of-income cap on the premium for a benchmark silver plan.

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New York's ACA alchemy: marketplace silver to Essential Plan platinum

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Greener pastures for New Yorkers of a certain income

New York has a pending ACA Section 1332 updated waiver proposal to CMS that would extend eligibility for the Essential Plan, the state’s zero-premium, low-out-of-pocket cost health insurance program, to applicants with incomes up to 250% of the Federal Poverty Level ($36,450 for an individual, $75,000 for a family of four) in April 2024.

The economics of the program appear to defy gravity, and perhaps suggest lessons as to the public funding of health benefits in the United States.

Shedding “Medicaid-ish” payment rates

As currently structured, New York's Essential Plan is a Basic Health Program, an option for states established by Section 1331 the Affordable Care Act. A BHP is a health coverage program for state residents with incomes up to 200% FPL offered in place of standard ACA marketplace coverage. The implicit premise of Section 1331 is that BHPs will pay lower rates to providers and plow those savings into reducing premiums and out-of-pocket costs for enrollees — rather like Medicaid.

The Essential Plan currently provides coverage with an actuarial value of 98% to enrollees with income up to 150% FPL, compared to 94% for benchmark silver coverage in conventional marketplaces, and an AV of 92% to enrollees in the 150-200% FPL income bracket, compared to 87% in the marketplace. The plan has no deductibles at any income level and includes dental and vision coverage. Plan benefits are standardized.

Democrats have twelve years of healthcare accomplishment to run on

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Chuck Schumer tours Adirondack Medical Center

HuffPost reports that Priorities USA is urging Democrats to tout recent healthcare achievements:

In a memo set to be published Wednesday, Priorities USA says the most popular achievements of President Joe Biden’s tenure are giving Medicare the power to negotiate prescription drug prices, capping the price of insulin and continuing expanded subsidies for the Affordable Care Act.

Priorities USA recommends focusing on these issues while also attacking Republicans for working to restrict abortion rights in the wake of the Supreme Court decision overturning Roe v. Wade.

Amen. And below those top lines -- the healthcare provisions in the Inflation Reduction Act passed this month -- Democrats should also tout a long tail of recent accomplishments that have improved healthcare affordability and access. Their claim to be the party of healthcare bears not only recent but cumulative weight.

Healthcare was a potent issue for Democrats in 2018, with Republicans fresh off their failed attempt to repeal the ACA's core programs in 2017.  Because they failed, the ACA Medicaid expansion and subsidized marketplace survived to catch the newly uninsured when more than 20 million Americans lost their jobs in the first onslaught of the COVID-19 pandemic. 

Triage: A dedicated source of funding to extend the ARPA subsidy boosts (if all else fails)

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The increases to premium subsidies in the ACA marketplace provided through 2022 by the American Rescue Plan Act (ARPA) have been a policy success, helping to boost marketplace enrollment by 21% this year.  During Democrats' long, weary negotiations over the Build Back Better bill in the fall, extension of those subsidies (first permanently, then, foolishly, for just 3 years) was taken as a given.  Even when BBB negotiation collapsed, failure to extend the subsidies seemed unthinkable...until it didn't.  

By May, it began to seem that Joe Manchin might not allow any Democratic priorities to pass via a reconciliation (bypassing the filibuster, and requiring all Senate Democrats to be on board). More recently, there's been a pulse -- apparently serious negotiations for a stripped-down bill possibly including climate investments, repeal of Republican tax cuts, empowering Medicare to negotiate prescription drug costs, and, maybe maybe, extension of the ARPA subsidy boosts for marketplace coverage.

Most recently, Manchin has made vaguely sympathetic but equivocal noises about extending the subsidy boosts, which are not a priority for him (the ACA Medicaid expansion insures about ten times as many West Virginians as the ACA private plan marketplace). And as Politico's Adam Cancryn outlines, his maunderings have left Democrats trying to squeeze them in with a dilemma.

Manchin hath decreed that a) any programs included in the reconciliation package be permanent, rather than sunsetting after a fixed number of years, and b) half the money raised through tax increases go to deficit reduction, leaving about $500 billion over ten years for all spending priorities. CBO estimated the 10-year cost of permanent extension of the ARPA subsidies at $210 billion. Prescription drug pricing reforms are projected to raise somewhere over $100 billion, depending on how they're structured. The three-year cost of ARPA subsidy extension, per CBO, is $74 billion. But, per Manchin rules...no temporary programs!

Given this Catch-22, it may be worth thinking about ever-present but studiously ignored (rightly, on the extra-Manchin merits) policy option: Fund the ARPA-level subsidies by funding the marketplace's Cost Sharing Reduction (CSR) subsidies in the original, statutory way, directly reimbursing insurers for their CSR costs.  CSR reduces out-of-pocket costs for low income enrollees (a slight majority of enrollees) who select silver plans.

Why Manchin may let the ACA subsidy boosts die

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Alarm bells are gonging for the possibility that even if Joe Manchin deigns to dictate to Democrats the terms of a reconciliation bill he'll vote for that includes some fragment of Democrats' spending priorities, it may not include extension of the boosts to ACA marketplace subsidies provided through 2022 in the American Rescue Plan Act. 

Charles Gaba relays reports from one paywalled site (Inside Health Policy) via another:

When a Punchbowl News reporter asked Thursday... whether a reconciliation deal is expected soon, Pelosi’s response was, “It’s alive.”

“There are certain concerns we have about subsidies in the health care bill and the rest, which may or may not be in the negotiations,” she said.

...President Joe Biden included drug pricing reform in an inflation-fighting proposal released over the weekend -- but his plan did not mention the enhanced ACA credits, raising some eyebrows.

..Democrats had counted on drug price controls to pay for the enhanced ACA subsidies, but Manchin recently said the subsidies did not come up in his talks with the White House.

ACA on the rocks

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Today Politico sounded an alarm that's been rising in Democratic policy circles: Democrats are walking right into an Obamacare fiasco of their own making. That is, if their lawmaking capacity is so paralyzed that they fail to extend the major boosts to ACA marketplace subsidies provided by the American Rescue Plan Act through 2022.

Politico's Adam Cancryn and Megan Messerly warn concisely:

The scenario has alarmed vulnerable lawmakers and White House allies, who have privately warned senior Democrats in recent weeks that the issue could cost Democrats control of the Senate and decimate their hard-earned reputation as the party of health care.

Politico does report some talks between Manchin and Democratic leadership. At this point, whether ARPA subsidies get extended appears to boil down to whether Manchin and/or Sinema simply want to destroy Democrats' electoral prospects -- now, and given the Republican drive to suppress votes and doctor vote counts, maybe forever. At the Washington Post's Plum Line, Greg Sargent is doubtful that Manchin will let any meaningful legislation pass.

As the clock ticks, I feel compelled to add my popgun to the salvo of increasingly desperate progressive healthcare groups and individuals begging Democrats to find a way to break the Manchin-Sinema blockade and extend the marketplace subsidy boosts provided by the American Rescue Plan. 

Albuquerque vs. Miami, or platinum vs. silver benchmark in the ACA marketplace

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A week ago, I put a spotlight on ACA marketplace plan offerings for 2022 in New Mexico, which has essentially implemented a platinum benchmark. That is, regulators have instructed insurers to price silver plans as if all enrollees have incomes below 200% of the Federal Poverty Level. Below that threshold, silver plans, enhanced by Cost Sharing Reduction (CSR) do have actuarial values comparable to those of platinum plans. Under these new pricing guidelines, some half-dozen gold plans are priced well below the benchmark (second cheapest) silver plan, and no one with an income above 200% FPL should buy silver.

While New Mexico is a very small market, this pricing scheme could and should be implemented nationwide. That possibility has implications -- or should have implications -- for Democrats' negotiations over the healthcare provisions to be included in the Build Back Better bill. 

Today, then, I want to compare what's available to buyers with incomes above 200% FPL in Albuquerque and in a market with a more typical pricing structure. Miami fits that bill. There, the lowest-cost gold plan is priced 8% above the benchmark silver plan. That's right at the average spread between lowest-cost gold and benchmark silver nationally during the silver loading era (2018-2021), according to KFF.

Total marketplace enrollment likely approaches 13 million

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Axios reports that Vice President Harris will announce today that more than 2.5 million people have signed up for marketplace coverage during the emergency Special Enrollment Period that began on February 15 and ends on August 15. (Yesterday, Charles Gaba estimated 2.57 million total SEP enrollments as of July 31.) [Update: CMS's SEP report through July 31 is out and cites the 2.5 million total.]

Just for fun, let's take a stab on where total marketplace enrollment likely stands right now. 

We know that effectuated enrollment totaled 11,290,546 in February, and that about 2.5 million additional enrollees have been logged since then. The wild card is disenrollments during those months. To estimate them, our best hints come from monthly enrollment tallies in 2020, recorded in the effectuated enrollment snapshot for February 2021.

Making the ACA work 2014-2016: Administrative roads not taken

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The Obama administration stood up the ACA's core programs in the face of a never-ending shitstorm of Republican defamation, disinformation, noncooperation on the state level, total litigation warfare, and fiscal sabotage. For that they deserve our undying thanks. 

By the time Obama left office, the ACA had cut the ranks of the uninsured by about 40 percent, mainly through Medicaid expansion. The marketplace and the expansion proved resilient through the Trump years and provided a vital safety net when the pandemic struck. Since February 2020, Medicaid enrollment by those rendered eligible by the expansion has increased by about 5 million, and marketplace enrollment (with a large push by the Biden administration) by close to two million.

In administering the ACA, however, the Obama administration operated under self-imposed restraints. Pre-Trump, and before Republicans passed their $2 trillion tax giveaway to the wealthy in 2017, Democrats had yet to recognize -- or rather, acknowledge --  the full extent of Republicans' economic fraudulence. Without new appropriations by Congress that they knew would not be forthcoming,  Obama and administration officials were reluctant to increase spending on ACA programs and so increase the deficit. They declined to take several measures that would make coverage more affordable or credible. These included the following.

In May, CMS quietly moved to shrink the ACA's coverage gap in states that have refused to expand Medicaid

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One of the most intractable of the holes in the ACA's implicit promise of affordable care for all is the so-called "coverage gap" opened up when the Supreme Court made the ACA Medicaid expansion optional for states in 2012, two years prior to scheduled full implementation. 

As originally enacted, the ACA provided Medicaid eligibility to adults in households with incomes up to 138% of the Federal Poverty Level (FPL). In the wake of the Supreme Court decision, just 25 states implemented this expansion upon the 2014 launch of the ACA's core programs. To date, thirteen holdout states have not enacted it. In those states, eligibility for ACA marketplace subsidies begins at 100% FPL, and some 2 million adults with incomes below that level get no help obtaining insurance.

There's no easy way for Democrats to plug this hole, as KFF's Larry Levitt recently explained on Twitter. They could make people in nonexpansion states with incomes below 100% FPL eligible for premium subsidies. But that might tempt states that have enacted the Medicaid expansion to rescind it, since the federal government pays 100% of marketplace premium subsidies and "only" 90% of Medicaid costs for expansion enrollees. They could create a new federally administered public option operating in nonexpansion states, but that's a heavy administrative lift, and very likely beyond the political capabilities of a Democratic party with razor-thin majorities.

As I mulled Levitt's thread, a partial and kludgy administrative response occurred to me: CMS could allow any applicant in a nonexpansion state to attest to an income over 100% FPL, without requiring documentation. In 2020, supplemental unemployment insurance provided by the CARES Act pushed a lot of incomes over the 100% FPL threshold, and enrollment for 2021 at 100-150% FPL in nonexpansion states soared 17%. Marketplace subsidy eligibility is based on an estimate of next year's income, and low income is notoriously uncertain and fluctuating. Why not open the door further?

I took a look at the statute setting the terms for marketplace subsidy eligibility and verification (42 U.S. Code § 18081) and the 2022 Notice of Benefit and Payment Parameters (NBPP) published May 5, 2021, seeking a way that current rules might be modified. It turns out that new rulemaking is unnecessary. 

As of now (effective May 5), CMS is declining to require verification of an income claimed to be above 100% FPL even if data sources tapped by CMS indicate that the applicant's income is below that threshold. The change is announced in the NBPP:

Elsewhere: the ACA survives and thrives

 For BlueWaveNJ, I've overviewed the legal threats to the ACA -- just overcome and still pending; the subsidy boosts enacted in the American Rescue Plan and their effects so far; and likely and unlikely next steps.  I covered similar ground at healthinsurance.org, with more attention to the remaining subsidy-eligible uninsured and measures to smooth and encourage enrollment.

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Obamacare enrollment at vaccination sites, part 1

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                                             Getting jabbed? Get covered too!

11 million uninsured Americans are eligible for ACA marketplace subsidies, according to KFF estimates. With the premium subsidy increases enacted in the American Rescue Plan Act (ARPA) in March, coverage can credibly be called "affordable" for most of them.  Another 7.3 million uninsured people are eligible for Medicaid, per KFF.

Ignorance of these offerings is rife. Less than a third of the public knows the ACA is still law, again according to KFF. Enrollment outreach, sabotaged by the Trump administration, has always been a challenge (as has the difficulty of navigating the application for some but not all enrollees).

While considering incremental ways to improve the ACA in my last post, it dawned on me that enrollment outreach at vaccination sites, or via email and texts connected with vaccination, was a golden opportunity to reach the uninsured.  Like most lightbulb thoughts, this one was far from unique.  It's occurred to many professional enrollment assisters -- probably hundreds. Some have acted on the thought.

The ACA as it should have been and may yet be: beyond premium subsidy boosts

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The Wall Street Journal's Stephanie Armour succinctly captures where Democrats seem to be at on the healthcare reform front:

Many progressive Democrats and President Biden are facing the political reality that far-reaching healthcare overhauls aren’t likely to succeed in the short term, which means their hopes may rest instead on building on recent Affordable Care Act changes and reducing prescription drug costs.

That is, make the premium subsidy boosts in the American Rescue Plan Act (ARPA) permanent, and maybe maybe maybe pay for it by getting some tangible form of prescription drug cost control past Democratic moderates. 

Pretty plainly left behind is the centerpiece of candidate Biden's healthcare plan, which also happens to be the continually submerged Ur-template for Democratic healthcare reform:

In New Jersey, silver plans are free or all but free up to 200% FPL

When New Jersey launched supplemental state premium subsidies along with the launch of its state-based ACA marketplace, GetCoveredNJ, in the fall of 2020, I was somewhat taken aback to note that the state subsidies were heavily weighted toward enrollees at higher incomes. 

The supplemental NJ subsidies ranged from $20/month at an income of 138% FPL ($17,609 for an individual) to $95/month, beginning at an income somewhere between 250% and 300% FPL (around $38,000 for 40 year-old individual, according to my price checks on GetCoveredNJ).

As I noted at the time,

The smaller subsidies at low incomes leave substantial premiums in place at incomes below 200% FPL for silver plans, which carry a strong CSR [Cost Sharing Reduction] benefit up to that income threshold.

For a 40 year-old with an income of $25,000 (just under 200% FPL), the lowest cost silver plan in most of the state will cost $86/month. The deductible is $800; the out-of-pocket maximum is $2,600. The lowest cost bronze plan is $17/month, with a deductible of $6,000 and an OOP max of $7,000. Last year, cheapest silver would have cost about $125/month. 

Well, the American Rescue Plan Act (ARPA), signed into law in March, with an extra boost from New Jersey, has solved that problem, at least through 2022 (and hopefully beyond, if Democrats make the new subsidy levels permanent as they intend).  New Jersey's income-weighted subsidies mesh quite well with the subsidy boosts provided by ARPA, which reduced premiums for a benchmark (second cheapest) silver plan with strong CSR to $0 at incomes up to 150% FPL and to 2% of income at 200% FPL.

The New Jersey supplemental subsidies all but wipe out premiums for a silver plan all the way to 200% FPL.  Here's what's available to a 40 year-old with an income of $25,500:

ARPA should reduce underinsurance in the ACA marketplace

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• While free bronze plans have been widely available to low income marketplace enrollees since 2018, the American Rescue Plan makes free or very low-cost silver plans with much lower out-of-pocket costs widely available.
  
  
• Bronze plan enrollment at low incomes spiked during Open Enrollment for 2021
  
  
• The American Rescue Plan may already be reversing the drift toward bronze at low incomes

The Urban Institute estimates that if the American Rescue Plan Act's increases to subsidies in the ACA marketplace are made permanent, enrollment will increase by 5.1 million, and the uninsured population will be reduced by 4.2 million. The enhanced subsidies are funded only through 2022 at present.

Urban foresees most of this enrollment increase -- about three quarters of it -- occurring at incomes over 200% of the Federal Poverty Level.  But ARPA should also reduce underinsurance, primarily at incomes below 200% FPL.

While ARPA does not reduce out-of-pocket costs at any metal level, it does make silver plans, which come with strong Cost Sharing Reduction (CSR) subsidies at incomes up to 200% FPL, much more affordable to low income enrollees. 

Free silver plans at incomes above 150% FPL

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The American Rescue Plan enacted last month radically though temporarily boosted premiums in the ACA marketplace. The premium paid by enrollees for the benchmark (second cheapest) silver plan is now set at $0 for enrollees with household incomes up to 150% of the Federal Poverty Level, and at 0-2% of income for enrollees with incomes in the 150-200% FPL range. That tops out at $43 per month for a single person with an income of $25,520.

Bronze plans are now available at zero premium to almost any enrollee with an income below 200% FPL (and to a fair number at higher incomes).  But bronze plan deductibles average $6,921.  At incomes up to 200% FPL, silver plans come with strong Cost Sharing Reduction (CSR), which brings deductibles down to an average of $177 for enrollees with incomes up to 150% FPL and $800 in the 150-200% FPL range. The contrast is similarly dramatic in annual out-of-pocket maximums, which usually top $8,000 in bronze plans. CSR brings them down to an average of $1189 at incomes up to 150% FPL and $2529 at 150-200% FPL. 

Prior to the subsidy boost, increasing numbers of enrollees with incomes below 200% FPL were selecting bronze plans, especially in the 150-200% FPL range, where benchmark silver topped out at $135/month for an individual (see The darker side of free bronze). The newly enhanced subsidies should reverse that trend. Still, even modest premiums are often experienced as steep at low incomes, and zero-premium plans remove administrative friction that deters some enrollees (arranging and executing on monthly premium payment can be surprisingly difficult). 

ACA 2.0 -- how's it going so far?

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On a temporary basis, the health insurance-related provisions of the American Rescue Plan Act (ARPA) signed into law on March 11 moved the Affordable Care Act much closer to living up to its name. Major boosts to premium subsidies effective through 2022 at every income level -- including an absolute cap on premiums for a benchmark plan as a percentage of income for every legally present person who lacks affordable access to other insurance -- credibly put coverage within financial reach of everyone motivated to seek it, albeit with more complexity of process and exposure to out-of-pocket costs than a truly universal system would require. That's a BFD, as a former vice president might say.

The changes became effective immediately and retroactively --  three months after the end of Open Enrollment for 2021 and with an emergency Special Enrollment Period still in progress. So, almost six weeks in, how's it going? A few notes below on implementation, benefit design, and future prospects.

• Fixing a plane in mid-flight (as the emergency SEP is effectively an Open Enrollment period), federal and sometimes state governments have moved with impressive swiftness. While subsidy boosts for those already enrolled were retroactive to Jan. 1, and would be credited eventually by the IRS, HealthCare.gov got the new subsidy schedule loaded on April 1, enabling enrollees to update their applications and get the increase subsidies applied to their monthly payments as of May 1. Most of the 15 state-based marketplaces have followed suit, or set a date by which it will be done (see Charles Gaba's chart at point #2 here). On April 9, the IRS issued guidance enabling 2020 enrollees who underestimated their income and so owed back excess tax credits to take advantage of an ARPA provision forgiving that payback, announcing that the form that details tax credits paid out does not have to be filed at all, and that the IRS will credit back excess APTC already paid back without any further action from the tax filer. 

Is the U.S. uninsured rate at an all-time low?

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Enough states have reported Medicaid tallies through February to posit that the pandemic has increased enrollment by more than ten million nationally since February 2020. Adjusting for the usual difference* between CMS's official totals (now posted through November**) and my sample below (based on state monthly reports), year-over-year enrollment growth since February 2020 is likely about 14.8%, and total enrollment likely stands at about 81.7 million. A quarter of the U.S. population is enrolled in Medicaid.

I don't think we've fully fathomed the effect on access to health insurance of the pandemic, the battered and flawed but still functioning and funded ACA programs in place as the pandemic hit, and pandemic relief measures.  Consider...

The Families First Act effectively required states to pause Medicaid disenrollments for the duration of the Covid-19 emergency, and enrollment will continue to grow until that moratorium ends.***  Enrollment growth among those rendered eligible by the ACA Medicaid expansion is close to 30%. In the ACA marketplace, average monthly enrollment in 2021 will probably exceed 2019 enrollment by at least a million, perhaps more, spurred by extended Special Enrollment Periods and subsidies enhanced by the American Rescue Plan Act. As the population ages, Medicare enrollment grows by about 1.5 million yearly. Meanwhile, the huge job losses triggered by the pandemic appear to have had only a modest effect on employer-sponsored insurance: enrollment through September was down by just 2-3 million, according to a KFF estimate.

The ACA as it should have been -- sort of, for a while at least

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Strictly speaking, by my my lights, "the ACA as it should have been" would be "Medicare for all who want it": a public plan paying Medicare rates to providers, accepted by all providers who accept Medicare, with competing private plans paying similar rates to providers and probably offering somewhat more generous coverage as a tradeoff for limitations in provider choice. These plans would be available to all, including those with access to employer-sponsored insurance. Oh, and add an OOP cap -- a cap on annual out-of-pocket costs -- to the public plan -- as we should do for traditional Medicare.

In the political universe we're bound by, however, "the ACA as it should have been" denotes the ACA more or less as is, but with subsidies generous enough to make coverage in the ACA marketplace truly affordable to most Americans who lack access to other insurance -- excluding (always, alas) undocumented immigrants.  

And that is about to happen! -- temporarily at least -- when Biden signs the American Rescue Plan Act of 2021 later this week (see Section 9661).   It's an eye-rubbing moment for progressives who've dreamed fruitlessly for a decade of an Affordable Care Act offering affordable coverage to almost all comers.

In The American Prospect: My Take on Jonathan Cohn's The Ten Year War

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I have a review in The American Prospect of Jonathan's Cohn's inside-the-creators' heads chronicle of the ACA's embattled formation and enactment:

Jonathan Cohn, a leading contemporaneous chronicler of the ACA’s formation and enactment, and now author of The Ten Year War: Obamacare and the Unfinished Crusade for Universal Coverage, is well aware of these shortcomings and faulty assumptions, as well as of the law’s resilience and partial success, such as reducing the uninsured population by about 35 to 40 percent. The book’s chief value, for me at least, lies in illuminating the creators’ perspectives at various crunch points in the law’s conception and enactment.

Cohn takes us back to a long time ago, in a galaxy far, far away, in which Democrats still hoped to win Republican support for major legislation...

The nuance with which Cohn captures the various players' assumptions and motives, and the pressures brought to bear on them, provides some real retroactive clarity, from what already feels like a substantial historical distance. I hope you'll read the review, which relies on substantial excerpts.