Amidst a number of national crises, the Biden Administration has hit the ground running in its first few weeks in office. The administration has prioritized efforts to combat the COVID-19 pandemic, but it is also working to strengthen the Affordable Care Act (ACA) by improving access and affordability of health insurance.
Biden was one of the few Democrats in the primary that did not run on a single-payer or Medicare-for-All type of proposal. His platform included implementing a public option and building on the ACA. As Democrats begin the new term with a small majority in Congress and the filibuster still intact, the public option appears to be less likely to make it through the legislative process, at least in the short term. However, Biden is following through on his promise to build on the ACA. His $1.9 trillion COVID relief proposal includes two key provisions that expand coverage options, and on January 28, 2021 he issued an executive order to strengthen elements of the ACA. On these progressive policies he has an unexpected source of support: health insurers that spent over $100 million to defeat the ACA a decade ago. With the support of a large coalition of hospitals, doctors and employer groups, insurers are now supporting efforts to strengthen and expand the ACA.
Opening Up the ACA Marketplaces
The Biden administration will re-open enrollment for the ACA marketplaces from February 15 to May 15, 2021. This will enable individuals who are uninsured to choose a plan on the marketplace if they missed their chance during the standard open enrollment period. Those currently enrolled could also switch to a new plan if they choose. At the beginning of the pandemic, consumer advocates, governors, and members of Congress were calling on the Trump administration to do the same but they declined to do so. Insurers joined the call as well, even though historically they have opposed relaxing the rules around special enrollment periods.
While it is always possible for those who have lost insurance coverage to access a special enrollment period, opening up the marketplace for everyone reduces bureaucratic barriers to coverage while a pandemic rages and many people have lost their jobs. KFF estimates that as many as 9 million uninsured people could gain subsidized coverage upon opening up marketplace enrollment and that 4 million people would likely qualify for a plan with no premium.
Opening up enrollment is only the first step. The Biden administration has pledged to spend $50 million on a national outreach and awareness campaign to encourage people to sign up. It is also likely to increase funding for marketplace Navigators, who assist people with eligibility determinations and enrollment. This will help ensure that those who stand to benefit know about the enrollment opportunity and can receive assistance during the often complex enrollment process. Speaking on behalf of its diverse membership of private health insurers, America’s Health Insurance Plans (AHIP) has expressed support of this new special enrollment period and investment in outreach and enrollment, in addition to other provisions of the January 28th executive order.
Expanded Subsidies for ACA Plans
Another significant proposal included in Biden’s COVID-19 relief package, which would fulfill a key campaign promise, is to increase the advance premium tax credits (APTCs) that people use to help pay for health plans purchased on the ACA marketplaces. The House Ways and Means Committee released a COVID-19 relief bill that expands eligibility for APTCs and enhances the subsidies for those already eligible. The plan would cap premium contributions at 8.5 percent of household income, including for those above 400 percent of the federal poverty line (FPL) who don’t currently qualify for subsidies.
The proposal outlined a new subsidy structure to provide no-premium coverage for those with incomes at 100-150 percent of the FPL, and caps premium contributions at increasing levels as income rises. The 8.5 percent cap serves as the highest contribution level for those making 400 percent of the FPL or higher. Millions of households that were already eligible for subsidies could see their premium burden decrease or even go down to $0 with these more generous subsidies. In addition, the legislation allows those who are receiving unemployment benefits to be eligible for $0 premiums.
In March of last year, insurers asked Congress to expand subsidies in light of the pandemic but it was never taken up in the Senate. This week, insurer groups including the Blue Cross Blue Shield Association (BCBSA) and AHIP have joined other health care and employer groups to specifically recommend an increase in APTCs and expanded eligibility for subsidies which is exactly what is done in the House Ways and Means proposal.
An estimated 10 million Americans have lost their jobs due to the pandemic, causing 30 million people to lose employee-sponsored insurance when including spouses and dependents. COBRA is a program that allows individuals who lose their benefits through their employer to be able to remain on the plan for a period of time, usually 18 months. While this can be useful for people going through job transitions, divorce, or other live events, COBRA does not require employers to continue paying their share of the premium, so individuals who opt for this option are left with a very expensive unsubsidized premium. Biden’s proposal provides subsidies for COBRA plans so those who are hoping to stay on their employer’s health plan may do so more affordably. Proposals in Congress subsidize 85 percent of the cost of COBRA premiums
Health insurers generally support this proposal. COBRA subsidies were included in one of the original COVID relief packages passed by the House last year, but was ultimately never taken up by the Senate. At the time, AHIP and the Blue Cross Blue Shield Association called for Congress to fully subsidize COBRA premiums for Americans who lost their employer sponsored insurance. As talks for another COVID-19 relief package ramped up last fall, AHIP again highlighted the need for temporary COBRA funding as job losses and furloughs continued.
KFF estimates that COBRA subsidies could cost the government $106 billion, while many of those opting for COBRA would be passing up other subsidized options in the form of Marketplace plans or Medicaid. However, the brief also noted that COBRA subsidies offered a familiar and less administratively burdensome option that would likely prevent tens of thousands of people from becoming uninsured. This week, insurers also joined the call to subsidize COBRA premiums, which was a priority of many employer groups represented on the coalition. Their proposal highlights the benefits of COBRA subsidies as an option for to avoid overwhelming the safety-net.
A New Beginning for the ACA
It is the first time Democrats have been in control of Congress and the Executive branch since the ACA was passed in 2010. The politics of the ACA has shifted dramatically since its inception. Americans have had time to experience its benefits, providers have profited from less uncompensated care, and insurers have finally adjusted to the dynamics of the new populations enrolling in coverage. As improvements to the embattled health care law go through the legislative process, insurers are likely to remain supportive of Biden’s efforts to build on the law after spending heavily to defeat it just 10 years ago.