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Recovery Legislation Should Include Health Policies to Boost Coverage, Reduce Disparities

As Congress works on the details of far-reaching economic recovery legislation, lawmakers should prioritize health policies that help make meaningful, lasting progress toward universal health coverage, narrow racial and ethnic inequities in coverage, and target much-needed help to people with low incomes.

Two policies would advance these goals and Congress and the Biden Administration should prioritize including them in recovery legislation: permanently closing the Medicaid “coverage gap,” and permanently enhancing premium tax credits to make coverage more affordable so that more eligible but uninsured people will enroll. One way to offset the cost of these coverage expansions is to reduce prescription drug costs, which helps consumers and also results in budgetary savings.

Covering more uninsured people is an essential step toward addressing persistent racial inequities in health care and health outcomes. People who have coverage have better access to care, including preventive care and treatment for chronic illnesses, and are less likely to go without it because of cost. A growing body of research shows that the Affordable Care Act’s (ACA) Medicaid expansion boosted coverage rates for adults and children, prevents premature deaths, and protects against financial insecurity. It’s also key to reducing high and increasing rates of deaths and severe health complications among people, especially Black people, who give birth.

Closing the Medicaid coverage gap would provide a pathway to coverage for the more than 2 million people with incomes below the poverty line who live in 12 states that have failed to adopt the ACA’s Medicaid expansion. Most of these adults are Black or Latino, and most live in the South. Under one proposal being considered, they would first enroll in subsidized plans in the ACA marketplaces and shift to a new federally run direct coverage program after several years, according to a recent press report. To make marketplace coverage workable for people with incomes below the poverty line, the legislation would need to enhance the marketplace plans for this group, including by eliminating most cost-sharing charges and aligning as closely as possible with Medicaid benefits.

People in the coverage gap deserve a permanent solution, not coverage that is scheduled to sunset a few years after they begin to benefit from it. It is highly unlikely that their states will adopt the Medicaid expansion, after so many years of refusing to do so. No state has adopted the expansion since Congress provided billions of dollars in incentive payments in the American Rescue Plan. And policymakers in these states have disregarded hundreds of studies showing the benefits Medicaid expansion brings to people with low incomes, to state budgets, and to health care providers, including hospitals.

A second key priority for expanding health coverage is to extend recent enhancements to marketplace premium tax credits that help more people afford coverage. Enhancements enacted as part of the American Rescue Plan prompted a surge in marketplace enrollment, with 2.5 million people gaining coverage between mid-February and mid-August. Those provisions only apply to 2021 and 2022; the recovery package should make premium tax credit improvements permanent.

Congress and the Biden Administration have an opportunity this year to expand health coverage to millions of uninsured people through both Medicaid and the health insurance marketplaces. While the recovery legislation will require some tough tradeoffs, they should seize the chance to make progress on these health priorities while they can.