Millions of people in the United States will be spared huge increases in health care costs next year after President Joe Biden signed legislation that extends generous subsidies for those who buy plans through the federal and state marketplaces.
The comprehensive climate, tax and health care bill sets aside $70 billion over the next three years to keep premium costs down for about 13 million people, just before reduced prices expire in a year beset by record-inflation. high.
As the calendar ticked toward the Nov. 1 open enrollment date, Sara Cariano was getting nervous about her job helping people across Virginia sign up for subsidized private health insurance on the HealthCare.gov website.
“I expected a very difficult conversation with people to explain why their premiums were going up,” said Cariano, a policy specialist at the Virginia Poverty Law Center.
But the passage of the “Inflation Reduction Act” erased these concerns.
“Things are not going to change for the worse for individuals who are buying coverage through the marketplace,” she said.
The bill would extend subsidies temporarily provided last year when Congress and Biden signed a $1.9 trillion coronavirus relief bill that significantly lowered premiums and out-of-pocket costs for customers who buy plans through the Affordable Care Act’s marketplace. It also continues to reduce costs for more individuals and families living well above the poverty line.
Only Democrats supported extended health care subsidies and other proposals in the bill Biden signed Tuesday. Republicans criticized the move as a major government overreach that will only worsen inflation. In reality, economists say, the bill will do little to fuel or extinguish the flames of excessive prices.
Marketplace health insurance premiums are expected to rise significantly next year — roughly 10 percent — according to an analysis by the Kaiser Family Foundation. Extended subsidies, which set premium payments based on income, will protect most people from these price increases, said Cynthia Cox, a vice president at the foundation.
“In general, people shouldn’t see increases in their premiums,” Cox said.
Those who bought plans in the government marketplace saved an average of about $700 in premium payments from subsidies this year, according to estimates from the Centers for Medicare and Medicaid Services.
As costs fell, more people signed up for coverage last year and the number of those without health insurance fell to a record low of 8% in August, the Department of Health and Human Services reported. About 26 million people, 2 percent of them children, remain uninsured in the US
In California, many of the 1.7 million people who buy health insurance through Covered California, the state-operated insurance marketplace, will continue to see savings ranging from $29 to $324 a month, depending on their income level.
State officials predict that about 220,000 people will be spared the price of out-of-pocket coverage. Between 2 million and 3 million people in California could also turn to the state marketplace if they lose coverage through Medicaid when the federal government’s COVID-19 public health emergency expires. About 15 million people in the US have had their Medicaid coverage expanded during the pandemic.
Cost is the biggest factor in whether a person signs up for coverage or not, said Joseph Poindexter, senior director of health insurance programs at HealthCare Access Maryland.
Some parents, for example, enroll their children in Medicaid but don’t buy coverage for themselves, he said.
“It’s true that you see people who will say, I’m going to give up treatment, or I’m not going to see a doctor,” Poindexter said.
Fewer people have had to do that math with subsidies, Poindexter said, attributing the lower prices to a 9% increase in new enrollees in the state last year.
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