CMS urges Congress to extend American Rescue Plan funds for ACA tax subsidies
HHS has announced new Colorado Option, a state-based health insurance option to lower premiums.
Photo: Alex Wong/Getty Images
Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure is pushing for Congress to extend Affordable Care Act tax subsidies made possible by American Rescue Plan funds.
The subsidies are scheduled to expire at the end of 2022.
In a press call from Colorado on Wednesday, Brooks-LaSure and other healthcare leaders said the tax subsidies have allowed individuals who otherwise couldn't afford health benefits to get coverage.
Should the tax subsidies end, Brooks-LaSure said, premium spending would rise by 47% for Coloradans.
"The bottom line is the American Rescue Plan lowers costs around health insurance," she said.
CMS can't extend the subsidies without congressional action, she said.
"Time is of the essence," Brooks-LaSure said. "It's really now."
On Thursday, the Department of Health and Human Services announced approval of a Colorado state innovation waiver request for the "Colorado Option," a state-specific health coverage plan to make insurance more affordable for close to 10,000 Coloradans starting in 2023. This is also expected to reduce racial and ethnic health disparities, HHS said.
The Section 1332 waiver would lower premiums for individuals, families and small businesses by up to 15% by 2025, HHS said. Working in conjunction with the existing 1332 waiver for a state-based reinsurance program, the option is expected to lower premiums by an average of about $132 per person, per month.
The Colorado Option covers all essential health benefits required by the ACA, including primary care, behavioral health and prenatal visits, at no cost.
WHY THIS MATTERS
Lowering the uninsured rate helps hospitals and providers mitigate the risk of uncompensated care.
Hospital uncompensated care decreased sharply immediately after ACA coverage provisions took effect, with declines from 2013 to 2015 that were several times larger in Medicaid expansion states than non-expansion states, according to the Center on Budget and Policy Priorities.
If subsidies expire at the end of the year, about 3 million Americans will lose their health insurance and 10 million will have reduced premium tax credits, according to Kevin Patterson, CEO, Connect for Health Colorado.
If the subsidies end, people who can't afford coverage will lose their coverage, he said.
THE LARGER TREND
The end of premium tax subsidies would result in about 15% of people who are currently insured in the ACA marketplace, losing coverage and becoming uninsured, according to the Assistant Secretary for Planning and Evaluation, Office of Health Policy.
Reductions in subsidies would average $406 per person annually for an estimated 8.9 million people. An estimated 1.5 million people would lose all subsidies at a cost of $3,277 per person annually.
The states most affected include California, Florida, North Carolina, Pennsylvania and Texas.
The American Rescue Plan increased access to zero-premium plans on HealthCare.gov from 43% to 62% of uninsured adults, according to the Office of Health Policy report. Access to low-cost plans of less than $50 a month for premiums increased from 57% to 73%.
The American Rescue Plan lowered the percentage of income that consumers were expected to contribute toward premiums for those between 100% and 400% of the federal poverty level and extended premium tax credits to households above 400% of the FPL.
Because of these changes, ACA enrollment hit an all-time high of 14.5 million people by the end of 2022 open enrollment period.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
