Kill the Cliff

A month ago I posted an analysis which gave a general idea of how much more various households will have to pay in health insurance premiums if the expanded financial subsidies provided by the American Rescue Plan (ARP) are allowed to expire at the end of this year.

Again, here's what the subsidy tables look like under the ACA itself and under the American Rescue Plan. The premium caps are the maximum percent of household income which a household has to pay for the benchmark Silver plan at various income ranges:

American Rescue Plan Subsidies

For years now, I've been a tireless advocate for dramatically expanding & improving the Affordable Care Act's Advance Premium Tax Credit (APTC) formula. This is the table which determines a) just how generous the ACA's health insurance premium tax credits are at different income levels and b) how far up the income ladder those financial subsidies extend.

Just over a year ago, the American Rescue Plan (ARP), passed by Democrats in Congress and signed into law by President Biden, did exactly what I've been clamouring for all this time: It made ACA subsidies far more generous while also removing the completely arbitrary income eligibility cut-off threshold (otherwise known as the "Subsidy Cliff."

As a refresher, the way the ACA subsidies work is as follows:

President Biden, Vice-President Harris, Speaker Pelosi

As expected, the healthcare section of President Biden's first address to a joint session of Congress (technically not a State of the Union, but close enough) included a call for making the subsidies expanded under the American Rescue Plan permanent as part of the American Families Plan.

Also as expected, he did not call for other major healthcare reform priorities to be baked into the #AmFamPlan.

He did, however, spend significant time calling for those other priorities to be passed separately from the AFP...considerably more than he did on the subsidies themselves.

Before I get into the proposed healthcare policies: Early on in the speech, Biden gave a shout-out to his Administration for the success of the current, ongoing COVID Special Enrollment Period:

White House Logo

After weeks of anticipation and jockeying for policy priorities to be included by various advocacy groups, President Biden is set to formally roll out the American Families Plan at a speech to a joint session of Congress this evening...the first such speech of his administration, falling just ahead of his 100th day in office.

The first half of Biden's larger "American Infrastructure Plan" is the "American Jobs Plan" which addresses "hard" infrastructure like road & bridge construction/repairs, green energy investment, broadband access, overhauling our clean water system and so forth.

The #AmFamiliesPlan comprises the second half, and includes the following:

The Urban Institute has come out with a brand-new analysis which projects the impact of making the ACA subsidies which have been expanded & enhanced temporarily under the American Rescue Plan permanent. In other words, this is what they expect the real-world impact would be if Congress were to finally #KillTheCliff and #UpTheSubs permanently (as opposed to for just 2021 - 2022), as I and other healthcare activists been pushing for for years now.

 

So, the American Rescue Plan includes two important provisions whch I've been fighting for for years: #KillTheCliff and #UpTheSubs. The only downside is that, for now at least, these ACA enhancements are only included for two years (including 2021...the beefed-up & expanded subsidies are retroactive to January 1st of this year).

As a reminder (this is like the 20th time I've posted a table like this), here's the official ACA subsidy formula compared to the improved formula under the American Rescue Plan (ARP):

Note: The Federal Poverty Level (FPL) is 15% higher per household in Hawaii and 25% higher in Alaska.

Back in January, I posted a story about the ACA subsidy improvements to be included in the then-pending American Rescue Plan (ARP). At the time, I noted what seemed to be a pretty big scoop:

...there's also another small but critical detail included in the table above which escaped my attention last summer in H.R. 1425.

Take a look at the first line of Rep. Underwood's 2019 version (H.R 1868):

  • Over 100.0 percent up to 133.0 percent

Now take a look at the first line under both H.R. 1425 and H.R. 369:

  • Up to 150.0 percent

Notice the difference? I'm not talking about the "up to 150%" part. I'm talking about the removal of the "Over 100.0 percent" part.

If this were to pass the House & Senate and be signed into law by President Biden using this exact language, it would apparently eliminate the Medicaid Gap...albeit with a couple of major caveats.

American Rescue Plan Savings - Family of 4

Last month I posted an explainer with a bunch of colorful graphs & charts explaining how much various households could save thanks to the expanded/enhanced ACA subsidies included with the American Rescue Plan. I included 8 different households, using the national average ACA benchmark plan premium for 2021:

  • Single Adults age 26, 40, 50 and 64
  • Single Parent; Nuclear Family; Empty Nesters w/College-age kid; 60-yr old couple

Here's how much the "Nuclear Family of four" example (40-yr old ocuple with 2 children) would theoretically save, assuming they choose the avg. national benchmark Silver plan:

June 16, 2020:

On March 20th, the Vermont Health Connect ACA exchange joined other state-based exchanges in launching a formal COVID-19 Special Enrollment Period.

On April 15th, just ahead of the original SEP deadline, they bumped it out by a month.

Then, with the May deadline approaching, I took a look and sure enough, they've bumped it out another month.

And now, with the June deadline having come and gone...

Due to the COVID-19 emergency, Vermont Health Connect has opened a Special Enrollment Period until August 14, 2020.

I admit that this is starting to get a bit silly. At a certain point I'm guessing at least one of the state exchanges will just say "screw it" and open 2020 enrollment up for the full year.

When the $1.9 trillion American Rescue Plan (ARP) achieved final passage on March 10th, it did so almost exclusively along party lines. I say "almost" because there was a single Democratic House member who voted against it: Representative Jared Golden (ME-02).

I fully understand the tightrope that some swing district Dems have to walk. To his credit, Rep. Golden voted to impeach Donald Trump not once, but twice (though he only voted in favor of one of the 2 articles of impeachment against him the first time around). I certainly don't expect every single Democrat to vote the party line on every single bill.

In the end, the bill passed anyway, if only by a handful of votes; my guess is that he even received Speaker Pelosi's unofficial blessing to vote against it, as long as she knew for sure it would pass regardless.

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