The Kaiser Family Foundation estimates that 3 million people could lose health coverage without an extension of enhanced subsidies for Obamacare marketplace plans, which were instituted as part of the American Rescue Plan Act last March.
They removed income restrictions on premium assistance and allowed more Americans to afford ACA marketplace plans; but did nothing to address structural issues that have increased premiums year-after-year.
How long will it last?
The Affordable Care Act prohibits insurance companies from denying coverage to those with preexisting conditions and requires them to cover preventive services like cancer screenings, cholesterol tests, annual check-ups and contraceptives for free. Furthermore, this act limits how long someone can go without coverage and allows young adults to remain on their parent’s plan until age 26; lifetime limits cannot be placed by insurers.
The Affordable Care Act was set to expire in 2022, but due to congressional action through the American Rescue Plan and Inflation Reduction Act it has now been extended through 2025 with significant ramifications for Marketplace enrollees receiving subsidies.
First and foremost, the Affordable Care Act ensures value for premium dollars by mandating that private health plans allocate at least 80% of premium dollar spent on medical costs and quality improvement – failing which, they must provide a rebate.
Additionally, the Affordable Care Act removed a significant cliff for premium tax credits (PTCs), so that families earning up to 400% of federal poverty level (FPL) can now receive assistance in paying their Marketplace premiums – this was a significant departure from its previous structure that limited PTCs only to those making under 200 percent FPL.
What will happen if the law is repealed?
The Affordable Care Act (ACA) established income-based premium tax credits (premium subsidies), making health insurance more accessible for people buying through its marketplaces or exchanges. The American Rescue Plan Act (ARP) increased these subsidies, but they were due to expire at the end of 2022 without its enhancements – otherwise a “subsidy cliff” would reappear, meaning those whose household income fell between 400% and 500% of poverty line would no longer qualify for assistance with paying their marketplace plans.
Repeal of the Affordable Care Act and its expansion of Medicaid for low-income adults would negate millions of people’s gains in financial security thanks to this law, such as reduced medical debt sent into collections; reduced eviction rates in states that have expanded Medicaid compared with states who have not expanded it; etc.
The Trump Administration and 18 state attorneys general, led by Texas, continue petitioning the Supreme Court for an opinion to strike down the Affordable Care Act (ACA). Should that occur, its effects would be devastating – destabilizing both America’s healthcare system and economy; health policy experts, patient groups, healthcare providers and insurance regulators from both parties warn about its real world repercussions that will be felt across society.
What will happen if the law is not repealed?
The Administration and a coalition of state attorneys general led by Texas are working hard to get a Supreme Court ruling striking down the Affordable Care Act (ACA), even though legal arguments against it are weak and its immediate and devastating effect would be felt by millions of Americans; such an event would undo progress made on key issues, including preexisting condition coverage and health insurance costs.
Millions of Americans who rely on the Affordable Care Act marketplace could see costly premium increases as a result of repeal of subsidies for this coverage option. Furthermore, CBO and JCT estimates have projected that such repeal would force nongroup insurers to withdraw from this market and lead to significant coverage losses for millions of people who depend on it for coverage.
The Affordable Care Act’s (ACA) marketplace subsidies have made these plans much more accessible, yet more affordable, for many individuals. They will expire in 2025 unless Congress takes steps to extend them further, at which point repeal and replacement proposals would likely not pass Congress, let alone survive presidential vetoes. Plans that reinstate individual responsibility requirements or penalise healthy individuals who buy coverage or reinstate health status underwriting in marketplaces may fail to garner bipartisan support and could subsequently face potential repeal efforts from both chambers of Congress.
