A few weeks ago I noted that, thanks to California Governor Gavin Newsom and the Democratically-controlled state legislature finally reaching a compromise agreement on how to allocate ~$330 million/year in revenue generated by the state's individual mandate penalty, around $83 million will be utilized to dramatically reduce out of pocket expenses for hundreds of thousands of ACA exchange enrollees.
MARYLAND WINS FEDERAL APPROVAL FOR “REINSURANCE” FOR ANOTHER FIVE YEARS
Program has helped drive down rates for Marylanders who buy their own health coverage to among the most affordable in the nation
BALTIMORE (July 5, 2023) – The Reinsurance Program that helped drive down costs for consumers who purchase their own health insurance in Maryland to among the lowest rates in the nation has been renewed for the next five years.
The U.S. Department of Health and Human Services and the Department of the Treasury informed Maryland health and insurance officials that they have approved the state’s application for the period from Dec. 31, 2023, when the current authorization expires, until Dec. 31, 2028.
The bottom line is that this funding was intended to go towards reducing health insurance premiums for ACA exchange enrollees via Covered California as supplemental subsidies to be added on top of federal ACA tax credits...but the passage of the American Rescue Plan and the subsequent Inflation Reduction Act kind of made that moot, since the federal subsidies were made more generous than what the state subsidies would have been anyway.
As a result, Gov. Newsom decided that the extra revenue should go into the general state fund, while Democrats on the state legislature wanted to redirect it to eliminate deductibles and other types of cost sharing for ACA enrollees instead. This led to an impasse for the past several months:
One of the most important provisions of the Inflation Reduction Act, passed with only Democratic votes in the U.S. House last summer, was this one: After decades of prior attempts, it finally allows the Centers for Medicare & Medicaid Services (CMS) to actively negotiate the price of at least some prescription drugs. As explained by the Kaiser Family Foundation:
The Inflation Reduction Act of 2022 (the Act), signed into law by President Biden in August 2022, includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government. One of the Act’s key drug-related policies is a requirement for the Secretary of Health and Human Services (HHS) to negotiate prices with drug companies for certain drugs covered under Medicare Part D (starting in 2026) and Part B (starting in 2028). This new requirement is the culmination of years of debate among lawmakers over whether to grant the federal government the authority to negotiate drug prices in Medicare.
This post has a long intro, but please bear with me...
Back in 2018, after the then-Republican controlled Congress zeroed out the ACA's federal "individual mandate penalty" (officially the "shared responsibility penalty"), I posted both a video and slideshow explainer about what this penalty was and why it was included in the ACA in the first place.
Inflation Reduction Act Tamps Down on Prescription Drug Price Increases Above Inflation
New Medicare Prescription Drug Inflation Rebate Program protects people with Medicare and taxpayers when drug companies increase prices faster than the rate of inflation
HHS announces savings for some people with Medicare on 27 Part B prescription drugs
The Biden-Harris Administration has made lowering prescription drug costs in America a key priority — and President Biden is delivering results. Today, the Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS), announced 27 prescription drugs for which Part B beneficiary coinsurances may be lower from April 1 – June 30, 2023. Thanks to President Biden’s new law to lower prescription drug costs, some people with Medicare who take these drugs may save between $2 and $390 per average dose starting April 1, depending on their individual coverage. Through the Inflation Reduction Act, President Biden and his Administration are lowering prescription drug costs for American seniors and families.
Back in September, Covered California announced that the weighted average individual market premium increases for 2023 (for unsubsidized enrollees) will be around 5.6%, down slightly from the 6.0% average requested by carriers. However, the press release, besides not including a carrier-level breakout of the rate hikes, also didn't say anything about California's small group market.
Back in July, Covered California posted the preliminary 2023 rate changes for ACA individual market healthcare policies. Overall, the weighted average rate hike was around 6.0% across the entire statewide market.
Yesterday, CoveredCA announced that thanks to the Inflation Reducation Act being signed into law by President Biden...
...@CoveredCA is announcing a reduction in its 2023 average rate change from 6% to 5.6%. The 0.4% decrease is due to the Inflation Reduction Act ensuring increased financial help for next year. Renewal begins Oct. 1 and #OpenEnrollment starts Nov. 1 for #ACA coverage.
Unfortunately they haven't posted the rate changes for each individual insurance carrier yet, but assuming it's fairly even across all of them, the premium savings should amount to something like:
Back in 2019, long before the American Rescue Plan passed, I embarked on an ambitious project. I wanted to see what the real-world effects would be of passing a piece of legislation which would eliminate the Affordable Care Act's so-called "Subsidy Cliff" while also strengthening the subsidy formula for those who qualified. Call it "ACA 2.0" for short, if you will (that's what I do, anyway).
This legislation has been around in near-identical form under one official title or another for years, usually bundled within a larger healthcare package. In 2018 it was called the "Undo Sabotage & Expand Affordability of Health Insurance Act of 2018" (or "USEAHIA" which is about as awkward a title as I can imagine.
