off the charts
POLICY INSIGHT
BEYOND THE NUMBERS

Economic Legislation Should Include Health Policies to Boost Coverage, Ease Strain on Families’ Budgets

Even during the pandemic the U.S. has made important progress on health care access and affordability, stabilizing people’s coverage and, early evidence suggests, reducing the ranks of people who are uninsured. Congress and the Biden Administration can build on this progress by closing the Medicaid “coverage gap” and extending temporary tax credit improvements in the Affordable Care Act (ACA) marketplace as part of an economic package this year.

It's critical to avoid going backward on health coverage rates, especially as high inflation is straining families’ budgets. People who have coverage have better access to care and are less likely to go without it because of cost. And affordable coverage can help reduce financial pressures on people struggling to afford other basic needs.

Beyond sustaining recent progress, it’s also vital to continue reducing the ranks of people who are uninsured. That’s especially true for the more than 2 million people in the coverage gap, who lack any pathway to coverage because they live in one of 12 states that failed to adopt the ACA’s Medicaid expansion. The ACA turns 12 this week, and it’s time for the federal government to deliver on the law’s promise for people in this group. They’ve been waiting too long, and for many their lives are at stake.

Permanently closing the Medicaid coverage gap and permanently extending premium tax credit improvements enacted under the American Rescue Plan would help millions of people gain coverage and help address persistent racial inequities in access to coverage and care.

The people in the coverage gap are a diverse group — they come from urban and rural communities, they span age groups from 19 to 64, and some 60 percent of them are people of color. All have incomes below the poverty line, and most live in Southern states that have high uninsured rates and a long history of policy decisions that restrict access to health coverage, often driven by racist views of who deserves coverage. Given some states’ refusal to adopt the Medicaid expansion, federal action is essential.

A growing body of research shows that the ACA Medicaid expansion boosted coverage rates for adults and children, and that it prevents premature deaths and protects against financial insecurity. It’s also key to reducing high and increasing rates of death and severe health complications among people who give birth, especially Black people.

And because most of the funds for closing the coverage gap would go to payments for health care services, it would reduce uncompensated care and allow more rural hospitals, safety net hospitals, and community health centers — many of which disproportionately serve people with low incomes and people of color — to stay open and even to provide more services in their communities.

In the ACA marketplace, meanwhile, enrollment surged thanks to premium tax credit enhancements in effect for 2021 and 2022. These enhancements eliminated or reduced premiums for millions of people and helped many people with low incomes afford more generous coverage with lower deductibles and other cost-sharing charges. As a result, a record 14.5 million people signed up during the ACA open enrollment period for 2022 — a 17 percent increase over the 2021 period.

But these improvements in health coverage will likely reverse unless Congress acts this year. Premium payments could double for millions of marketplace enrollees. Some may struggle but decide to pay the higher cost; others may forgo coverage and become uninsured. Many people will learn of the premium changes in the fall, ahead of the enrollment period for 2023 plans, scheduled to start November 1.

Policymakers face an important decision. They should choose to make further progress on affordable health coverage — a lifeline to millions during the pandemic — while reducing financial challenges for families.