The American Rescue Plan Act was approved by the Biden administration in March 2021 to provide continuous aid to ACA members during the coronavirus epidemic. ARPA raised premium tax credits and made the Affordable Care Act (ACA) available to those with incomes exceeding 400% of the federal poverty line (FPL). ACA customers may face higher rates in 2023 if the ARPA’s Affordable Care Act subsidies are not made permanent.
- Tax Credits: The tax credits under the current ARPA standards will expire on December 31, 2022. AHIP and Avalere Health have released data estimating how much members’ premiums will increase in 2023 if the ARPA tax credit enhancements are not made permanent.
- Impact of the credit: If the ARPA tax credits are not extended beyond the current 2022 expiration date, 18 million Americans could suffer significant increases to their out-of-pocket premiums, according to the research. The 2023 premium increases will become evident when individuals receive their renewal letters by November 1, 2022.
- Premiums: Individuals who become eligible for Affordable Care Act subsidies under ARPA could be hit particularly hard if the subsidies are not made permanent. AHIP referenced additional Avalere research in the press release that looked at the estimated 2023 premiums for members in specific cities and counties.
- Reductions: The ACA premium tax credits led to 940,000 new enrollees in the federal health insurance market. Monthly premiums decreased by more than 25 percent for these members. Their out-of-pocket healthcare spending also dropped by nearly 90 percent, due to more affordable plan options. The ARPA subsidies reduced monthly premiums for almost two million current members as well.
- Pathway to affordable health: “Every American deserves access to affordable, high-quality coverage and equitable care,” Matt Eyles, president, and chief executive officer of AHIP, said in the press release. “After more than a year of an unprecedented pandemic, when reliable, affordable health coverage has been so essential to the health and well-being of Americans, we urge Congress to permanently adopt these tax credit enhancements to protect the coverage on which hundreds of millions of Americans rely on.”