Health

Urban Institute: Making enhanced ACA subsidies permanent could extend coverage to nearly 1M

Nearly 1 million uninsured children and parents could get insurance coverage if temporary, enhanced income-based subsidies on the Affordable Care Act’s exchanges would be made permanent, new data show.

The analysis, released Tuesday by the Urban Institute, comes as Democrats in Congress are attempting to extend enhanced subsidies that expire after the 2022 coverage year. The subsidies passed as part of the American Rescue Plan Act help to dramatically lower the cost of insurance for people with low incomes.

“If the [American Rescue Plan Act’s] enhanced subsidies were made permanent, we find that the number of uninsured children would fall by approximately 303,000, and the number of uninsured parents would fall by about 686,000,” the analysis said. “The number of uninsured young children would fall by about 67,000 and about 267,000 parents of young children would gain coverage.”

The enhanced subsidies ensured anyone with an income below 150% of the federal poverty level didn’t pay any premiums for coverage. Anyone with 400% above the poverty level would also qualify for subsidies and not pay more than 8.5% of their income on healthcare, a major change from the current law where those consumers would not be eligible for any subsidies.

The analysis found that children and their parents could benefit from the enhanced subsidies in at least three ways. These are children gaining coverage if families can newly purchase coverage, if uninsured parents can get coverage through newly affordable options or if already insured children could benefit from other family members gaining coverage.

“Understanding these effects will provide policymakers with insights for strengthening the health and financial well-being of children and families and identify remaining gaps in coverage affordability and accessibility,” the analysis said.

Urban found that uninsured rates would drop from 4.6% to 4.2% for children and from 10.8% to 9.8% for parents if the subsidies were made permanent.

RELATED: Urban Institute: Outreach to uninsured about ACA exchanges, subsidies lacking

Children and families that make between 200% to 400% of the federal poverty level would be the biggest beneficiaries of the permanent subsidies.

“Of approximately 303,000 children who would gain coverage, about 198,000 would live in families with moderate incomes,” the analysis said.

The analysis also found benefits beyond just extending healthcare coverage. Urban estimates approximately 4.5 million children and parents who had nongroup coverage before the new subsidies took effect could benefit from the reduction in premiums and out-of-pocket spending.

“Across all income groups, these families would experience an average reduction in premium spending of about 28% per person and an average reduction in [out-of-pocket] spending of 4% per person,” the analysis said.

Democrats in Congress are hoping to extend the subsidies in a massive infrastructure package. But House Speaker Nancy Pelosi admitted during a press conference Tuesday that the $3.5 trillion price tag will be pared down.

When asked whether Democrats will have to drop some of the programs that the massive legislation contains, including provisions on childcare and healthcare, Pelosi said, “we hope not.”

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