Editor’s note: Heather Korbulic is the senior policy and strategy lead at GetInsured, where she helps healthcare policy leaders develop strategies for the provision of healthcare and other public benefits. She was previously the executive director of Nevada’s health insurance marketplace, the Silver State Health Insurance Exchange.
The COVID-19 pandemic forced the United States to cope with a health insurance crisis it didn’t anticipate. Congress and the Biden administration responded by enacting policies to expand access to subsidized private health plans sold through Affordable Care Act exchanges.
The results were nothing short of spectacular: Fewer than 10% of Americans are uninsured, compared to nearly 22% in 2010. In addition, a record 14.5 million consumers are enrolled in a state health insurance exchange plan.
However, unless Congress takes action, the subsidies will expire at the end of the year, and millions of Americans will experience dramatic price increases, become uninsured and likely accrue medical debt.
The American Rescue Plan (ARP) enabled consumers to enjoy lower premiums and access to premium tax credits regardless of income. This made health insurance more affordable for individuals and families, which led to a record 21% increase in public health exchange enrollment compared to prior coverage years.
State-based exchanges enrolled an additional 600,000 individuals, according to the National Academy for State Health Policy, which also reported the average premium savings ranged from 7% to 47% across the state exchanges. Further, 20% or more of enrollees are paying less than $25 per month for coverage in at least eight states. It is a significant achievement to make health insurance affordable for those who once considered coverage financially out of reach.
Returning consumers can even save, on average, 40% off of their monthly premiums because of enhanced tax credits in the ARP, according to the CMS. These changes are possible because the federal government reduced the salary ceiling for tax credits, recognizing a universe of low and middle-income people who earned too much to qualify for Medicaid but found the prices of most insurance plans out of reach.
In some cases, the credits saved individuals thousands a year. The cost, for instance, of a “silver” health plan is currently $390 a month with subsidies for individuals earning $55,000 annually, down from $560 a month.
Unfortunately, those cost savings may end, leaving individuals with the hard decision of either paying for coverage or paying for basic necessities. More often than not, the latter wins out. Securing insurance through an employer isn’t always a better (or even viable) option, since premiums in employer-sponsored plans increased 3.6% in 2021 and 3.9% in 2020, according to the Urban Institute.
The impending expiration, which could leave millions uninsured, comes at a time when Americans are resuming regular doctor visits and COVID-19 cases are once again on the rise. The conditions are ripe for the healthcare crisis to balloon again. And so will the nation’s growing medical debt problem, as people without insurance get saddled with doctor bills they can’t afford to pay.
Research by the Consumer Finance Protection Bureau showed $88 billion in medical debt on Americans’ credit records as of June of last year. According to the White House — which just announced steps to relieve this economic burden — one in three American adults has medical debt, a number likely to increase as the subsidies expire and many shed their healthcare coverage.
It is the most common debt collection and, although different than other debt as it was incurred faultlessly or accidentally, it can still negatively impact individuals financially and keep them from seeking out further medical care.
Congress could get ahead of this brewing crisis by extending the enhanced premium subsidies. The Build Back Better Act (BBBA), which never left the Senate, would extend these enhancements through 2025. Renewed discussions of reviving portions of the BBBA have even contemplated a 10-year extension through 2032. Democrats were hopeful of movement by Memorial Day but that soft deadline quickly passed.
Regardless of the length of any extension, it is imperative that Congress take action this summer at the latest in order to avoid any confusion when states begin their open enrollment period for individuals to enroll in insurance plans. Delaying any longer will cause widespread confusion and millions of consumers may choose to go without coverage as a result, risking both their health and exposing themselves to possible medical debt.
We’ve taken two steps forward in increasing access to affordable health care coverage for Americans. Let's not take three steps back.
