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House Bill Would Help Millions Get Health Coverage, Cut Costs for Millions More

The House is expected to vote today on a bill that would lead 4 million people to gain health coverage, the Congressional Budget Office estimates, while making coverage more affordable for at least 13 million more, likely benefiting well over 17 million people in total. The Patient Protection and Affordable Care Enhancement Act would strengthen both the Affordable Care Act (ACA) marketplaces and Medicaid. These improvements are especially important given that millions of people have likely lost job-based health insurance in recent weeks due to the deep economic downturn, many of whom will become uninsured if they lack access to these programs.

Making Marketplace Coverage More Affordable

The ACA’s premium tax credits and cost-sharing assistance for marketplace plans have helped millions gain coverage. But many people who are eligible for this assistance remain uninsured, often because they can’t afford the premiums even with premium tax credits. Despite ACA financial assistance, uninsured rates remain much higher among lower-income people. State programs that supplement the ACA premium tax credits substantially increase enrollment in coverage, studies show, confirming that cost is a key barrier.

The House bill would boost marketplace financial assistance significantly. For low- and moderate-income people who already qualify for premium tax credits, it would sharply cut net premiums (the cost after factoring in the tax credits), including eliminating premiums for enrollees with incomes below 150 percent of the poverty line (about $19,000 for a single adult). It would also extend eligibility for the credits to middle-income people facing high premium burdens, capping net premiums at 8.5 percent of income. (See figure.)

These improvements would benefit over 10 million people who already buy marketplace or other ACA coverage (including 8.9 million people who already qualify for premium tax credits and at least 1.3 million who’d be newly eligible) and provide more affordable options to millions of people now uninsured.

Other parts of the bill would also expand access to marketplace coverage or make it more affordable, by:

  • Lowering premiums for millions more people in low- and moderate-income working families, by enabling people who have an offer of employer coverage — but with premiums for family coverage that would exceed 9.5 percent of their income — to receive premium tax credits toward buying marketplace coverage.
  • Reversing the Administration’s expansion of so-called “short-term” health plans. These substandard plans can leave enrollees who get sick with staggeringly high costs. As we’ve explained, short-term plans draw healthy people away from the marketplaces; limiting their availability would reduce premiums for comprehensive coverage and protect consumers from plans that often look for ways to deny enrollees’ claims.
  • Reversing the Administration’s deep cuts to marketplace outreach. Outreach and marketing work: they increase enrollment in coverage and reduce uninsured rates. The bill would require, and fund, the marketplace to conduct outreach, including among groups that are particularly likely to need help connecting to care, such as people with low incomes and communities of color.
  • Reducing marketplace premiums through federal reinsurance funding. Reinsurance programs reduce sticker price premiums by reimbursing insurers for part of their costs for high-cost enrollees.

By expanding premium tax credits, lowering sticker price premiums, and making subsidized marketplace coverage available to more people with unaffordable employer plans, the bill would make lower-premium options available to all of the roughly 13 million people who purchase ACA coverage, plus additional people now paying high premiums for employer coverage.

Encouraging States to Expand Medicaid

Under the ACA, states can expand Medicaid to adults with incomes up to 138 percent of the poverty line. Expansion has increased coverage, improved access to care, reduced individuals’ medical debt and providers’ uncompensated care costs, and averted thousands of premature deaths. But 15 states still haven’t implemented expansion, leaving about 4 million people uninsured.

Under the House bill, the federal government would pay 100 percent of expansion costs for the first three years as it did for 2014 to 2016, when expansion first took effect. (The current share is 90 percent.) Expansion is already producing net savings for many states because they pay only 10 percent of the cost and because expanding coverage reduces states’ costs for uncompensated care, behavioral health, and other programs. Under the House bill, expansion by additional states would be a clear boon to those states’ budgets, at a time when most states are struggling with huge, recession-induced budget shortfalls due to sharp declines in their tax revenues.

Improving Medicaid Coverage for Other Groups

The bill’s other important Medicaid improvements include:

  • Promoting continuous coverage through Medicaid. Almost half the states already guarantee 12 months of eligibility to children enrolling in Medicaid, and two do so for adults. The bill would require all states to provide both children and adults with 12 months of continuous coverage. That would improve access to care, improve continuity of care, and reduce administrative costs by reducing the number of people cycling in and out of coverage.
  • Extending postpartum coverage. States now only have to provide pregnancy-related Medicaid coverage until 60 days after childbirth, even though postpartum health issues can arise through the first year. Maternal mortality rates have risen nationally in recent years, with stark racial and ethnic disparities. The bill would extend postpartum coverage to 12 months, improving access to critical postpartum care for low-income women.
  • Restoring Medicaid eligibility for Compact of Free Association (COFA) migrants. In exchange for special access for the U.S. military, the United States provides nations covered under COFA with certain services and lets their citizens travel, live, and work in this country. Yet these individuals have been ineligible for Medicaid coverage since 1996. The House bill would eliminate that restriction.
  • Boosting Medicaid funding for Indian health care providers. The bill would raise federal Medicaid funding for Urban Indian Health Program services for American Indian and Alaska Native people enrolled in Medicaid, as well as for services referred by Indian health care providers. That could improve access to care by alleviating these providers’ severe resource and capacity constraints.