It was in early 2021 that Congressional Democrats passed & President Biden signed the American Rescue Plan Act (ARPA), which among other things dramatically expanded & enhanced the original premium subsidy formula of the Affordable Care Act, finally bringing the financial aid sliding income scale up to the level it should have been in the first place over a decade earlier.
In addition to beefing up the subsidies along the entire 100 - 400% Federal Poverty Level (FPL) income scale, the ARPA also eliminated the much-maligned "Subsidy Cliff" at 400% FPL, wherein a household earning even $1 more than that had all premium subsidies cut off immediately, requiring middle-class families to pay full price for individual market health insurance policies.
Here's what the original ACA premium subsidy formula looked like compared to the current, enhanced subsidy formula:
It was in early 2021 that Congressional Democrats passed & President Biden signed the American Rescue Plan Act (ARPA), which among other things dramatically expanded & enhanced the original premium subsidy formula of the Affordable Care Act, finally bringing the financial aid sliding income scale up to the level it should have been in the first place over a decade earlier.
In addition to beefing up the subsidies along the entire 100 - 400% Federal Poverty Level (FPL) income scale, the ARPA also eliminated the much-maligned "Subsidy Cliff" at 400% FPL, wherein a household earning even $1 more than that had all premium subsidies cut off immediately, requiring middle-class families to pay full price for individual market health insurance policies.
Here's what the original ACA premium subsidy formula looked like compared to the current, enhanced subsidy formula:
Over at the JAMA Network, KFF Executive VP for health policy Larry Levitt has a piece which lays out the most likely actions (or in one case, lack of action) that the incoming Trump Administration & Republican-controlled Congress will take now that they have a second shot at repealing the Affordable Care Act:
With many tax cuts from the 2017 Tax Cuts and Jobs Act expiring at the end of 2025, a high-profile Congressional debate over extending those tax reductions and enacting new ones is likely. There will be pressure from some in Congress for spending cuts to help pay for those tax cuts. Trump has said that Social Security and Medicare cuts are off the table, and defense reductions are unlikely as well. That means almost half of federal spending would be protected from cuts, leaving Medicaid, which is the next largest source of federal spending, and the ACA as prime targets for spending cuts. The math is inescapable.
Re: The Effects of Not Extending the Expanded Premium Tax Credits for the Number of Uninsured People and the Growth in Premiums
Dear Chairman Wyden, Ranking Member Neal, Senator Shaheen, and Congresswoman Underwood:
You have asked the Congressional Budget Office to discuss the effects on health insurance coverage and premiums that will result from not extending—either for one year or permanently—the expanded premium tax credit structure provided in the American Rescue Plan Act of 2021 (ARPA, Public Law 117-2).
ARPA reduced the maximum amount eligible enrollees must contribute toward premiums for health insurance purchased through the marketplaces established by the Affordable Care Act, and it extended eligibility to people whose income is above 400 percent of the federal poverty level (FPL). Those provisions were extended through calendar year 2025 in the 2022 reconciliation act (P.L. 117-169).
It was in early 2021 that Congressional Democrats passed & President Biden signed the American Rescue Plan Act (ARPA), which among other things dramatically expanded & enhanced the original premium subsidy formula of the Affordable Care Act, finally bringing the financial aid sliding income scale up to the level it should have been in the first place over a decade earlier.
In addition to beefing up the subsidies along the entire 100 - 400% Federal Poverty Level (FPL) income scale, the ARPA also eliminated the much-maligned "Subsidy Cliff" at 400% FPL, wherein a household earning even $1 more than that had all premium subsidies cut off immediately, requiring middle-class families to pay full price for individual market health insurance policies.
Here's what the original ACA premium subsidy formula looked like compared to the current, enhanced subsidy formula:
It was in early 2021 that Congressional Democrats passed & President Biden signed the American Rescue Plan Act (ARPA), which among other things dramatically expanded & enhanced the original premium subsidy formula of the Affordable Care Act, finally bringing the financial aid sliding income scale up to the level it should have been in the first place over a decade earlier.
In addition to beefing up the subsidies along the entire 100 - 400% Federal Poverty Level (FPL) income scale, the ARPA also eliminated the much-maligned "Subsidy Cliff" at 400% FPL, wherein a household earning even $1 more than that had all premium subsidies cut off immediately, requiring middle-class families to pay full price for individual market health insurance policies.
Here's what the original ACA premium subsidy formula looked like compared to the current, enhanced subsidy formula:
It was in early 2021 that Congressional Democrats passed & President Biden signed the American Rescue Plan Act (ARPA), which among other things dramatically expanded & enhanced the original premium subsidy formula of the Affordable Care Act, finally bringing the financial aid sliding income scale up to the level it should have been in the first place over a decade earlier.
In addition to beefing up the subsidies along the entire 100 - 400% Federal Poverty Level (FPL) income scale, the ARPA also eliminated the much-maligned "Subsidy Cliff" at 400% FPL, wherein a household earning even $1 more than that had all premium subsidies cut off immediately, requiring middle-class families to pay full price for individual market health insurance policies.
Here's what the original ACA premium subsidy formula looked like compared to the current, enhanced subsidy formula:
Back in June, I ran a state-by-state analysis which provided estimates of just how much various households would see their net individual market premiums jump starting in 2026 if the upgraded financial subsidies originally included in the American Rescue Plan Act (and later extended by the Inflation Reduction Act) are allowed to expire at the end of 2025, as is currently scheduled to happen without legislative action.
The Inflation Reduction Act is saving Americans millions in lower prescription drug costs and making health insurance more affordable.
Two years ago today, President Biden signed into law historic legislation to lower health care costs for millions of Americans. The Inflation Reduction Act, also known as the lower cost prescription drug law, created the first ever annual cap on out-of-pocket drug costs for people with Medicare, capped the cost of each covered insulin at $35 per month, granted Medicare the power to directly negotiate drug prices, and made Affordable Care Act (ACA) marketplace plans more affordable, leading to the lowest uninsured rate in history.
In a historic moment that will help lower prescription drug prices for millions of people across America, the Biden-Harris Administration announced that it has reached agreement for new, lower prices for all 10 drugs selected for negotiations. These negotiated drugs are some of the most expensive and most frequently dispensed drugs in the Medicare program and are used to treat conditions such as heart disease, diabetes, and cancer. The new prices will go into effect for people with Medicare Part D prescription drug coverage beginning January 1, 2026.
