Editor’s Note: Heather Korbulik is Senior Policy and Strategy Leader at GetInsured, where she helps health policymakers develop strategies for delivering health and other public goods. Previously, she was the executive director of Nevada’s health insurance marketplace, the Silver State Health Insurance Exchange.
The COVID-19 pandemic has forced the United States to deal with a health insurance crisis that it did not anticipate. Congress and the Biden administration have responded by enacting policies to expand access to subsidized private health plans sold through the Affordable Care Act exchanges.
The results were simply amazing: Less than 10% of Americans are uninsuredcompared with almost 22% in 2010 year. In addition, a record 14.5 million consumers are enrolled in the public health insurance exchange plan.
However, if Congress doesn’t act, the subsidies will expire at the end of the year, and millions of Americans will face price hikes, lose insurance, and likely accumulate medical debt.
The American Rescue Plan (ARP) allowed consumers to receive lower premiums and access to tax credits regardless of income. This has made health insurance more affordable for individuals and families, resulting in a record 21% increase in the public health system compared to previous years of coverage.
State exchanges have attracted an additional 600,000 people, according to data National Academy of Public Health Policy, which also reported that average premium savings range from 7% to 47% across the state’s exchanges. In addition, 20% or more of members pay less than $25 per month for coverage in at least eight states. Making health insurance affordable to those who once considered insurance coverage financially unattainable is a significant achievement.
Returning consumers can even save on average 40% of their monthly bonuses due to the extended tax breaks in the ARP, according to CMS. These changes are possible because the federal government lowered the payroll ceiling for tax credits, recognizing the many low- and middle-income people who were earning too much to qualify for Medicaid but found the prices of most insurance plans to be unaffordable.
In some cases, loans have saved people thousands of dollars a year. The current cost of, for example, a silver health plan $390 per month with subsidies for individuals earning $55,000 a year, up from $560 a month.
Unfortunately, these cost savings can run out, leaving people with a difficult choice: either pay for insurance coverage or pay for essentials. Most often, the latter wins. Employer insurance isn’t always the best (or even viable) option, according to the Urban Institute, with employer-sponsored plans up 3.6% in 2021 and 3.9% in 2020.
The upcoming expiration, which could leave millions uninsured, comes at a time when Americans are resuming regular doctor visits and COVID-19 cases are on the rise again. Conditions are ripe for a health crisis to flare up again. So is the country’s growing medical debt problem, as people without insurance are saddled with doctor bills they can’t afford to pay.
Research work The Consumer Finance Bureau showed that as of June last year, Americans’ medical debt was $88 billion. According To the White House, which has just announced steps to alleviate this economic burden, one in three American adults is in medical debt, and that number is likely to increase as subsidies expire, with many dropping health insurance.
This is the most common form of debt collection, and although it differs from other debts because it was received infallibly or by accident, it can still negatively impact people financially and prevent them from seeking further medical care.
Congress could get ahead of this looming crisis by extending extended premium subsidies. The Better Recovery Act (BBBA), which never left the Senate, would have extended those improvements through 2025. Resuming discussions about resurrecting parts of the BBBA even included a 10-year extension to 2032. Democrats hoped for a Memorial Day move, but what soft deadline passed quickly.
Regardless of the length of the renewal, it is imperative that Congress act no later than this summer to avoid confusion when states begin their open enrollment period for individuals wishing to enroll in insurance plans. Further delay will cause widespread confusion, and as a result, millions of consumers may decide to go uninsured, risking both their health and possible medical debt.
We have taken two steps forward in expanding access to affordable health insurance for Americans. Let’s not take three steps back.