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Expiring Assistance Threatens Affordable Health Care in the US

Congress Should Extend Lifeline for Low- and Middle-Income Families

A demonstration in support of the Affordable Care Act (ACA) outside of the US Supreme Court, November 10, 2020.  © 2020 Sipa USA via AP

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.

More than three million people could become uninsured if these subsidies are rolled back, and others may move to less protective, high deductible health plans.

Human Rights Watch has documented how people facing steep out-of-pocket costs because of inadequate health insurance coverage are more likely to ration essential medicines like insulin, and are more likely to avoid preventive health care that can detect and treat preventable diseases like cervical cancer

US households are already struggling with increasing living costs. Unaffordability of healthcare costs, in particular, disproportionately impacts women, communities of color, and people with low incomes. Congress should act quickly to extend or make permanent these subsidies to avoid a damaging and unnecessary step backwards.

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