Reporting on how much consumers will save on health insurance under the American Rescue Plan Act (ARPA) has never been easy, but last week, it got more complicated.
Previous studies on how ARPA would affect household spending on health insurance underestimated the effects of the law, according to a report on Oct. 6 from the Commonwealth Fund. That means consumers could spend much less out of pocket for copayments and deductibles if Congress passes the reforms being debated now under budget deliberations. The increased savings come because of a recalculation of the effects of ARPA, the fund reported.
Although the recalculation didn’t get much coverage, this story is important for journalists because the increased savings could be in the billions of dollars. In addition, the reforms proposed in Congress would cut the number of Americans without health insurance by 7 million, the fund reported.
In a report the fund published in September, “The Coverage and Cost Effects of Key Health Insurance Reforms Being Considered by Congress,” researchers from the Urban Institute noted that members of Congress have proposed a budget this year that includes reforming the Affordable Care Act (ACA) in two ways. One reform would make permanent the enhanced premium subsidies in ARPA that otherwise would expire at the end of next year. The other reform would fix what’s called the Medicaid coverage gap by extending eligibility for subsidies on the ACA marketplaces to people earning below 100% of the federal poverty level (FPL) in the 12 states that have not expanded Medicaid.
In those 12 states (Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin and Wyoming), Medicaid eligibility for adults is strictly limited. The median annual income limit for a family of three is just 41% of the FPL, or $8,905. Also, childless adults are ineligible.