As part of the budget process for fiscal year 2022, Congress is considering a package of two reforms to the Affordable Care Act (ACA). Under the package, the enhanced premium subsidies included in the American Rescue Plan Act (ARPA) would become permanent. Additionally, the so-called Medicaid coverage gap would be filled by extending eligibility for marketplace subsidies to people earning below 100 percent of the federal poverty level (FPL) in 12 states that have not yet expanded Medicaid. Together, we find that these two policies would broadly expand eligibility for marketplace subsidies, reduce the number of uninsured people especially at lower income levels, and lessen household burdens for health care.
Highlights of the results:
- Making ARPA premium subsidies permanent and filling the Medicaid coverage gap would reduce the number of uninsured people by nearly one-quarter, or 7.0 million people, in 2022.
- All states would see declines in uninsured people with the largest percentage declines in states that have not yet expanded Medicaid eligibility.
- The number of uninsured Black Americans would fall by about one-third.
- Subsidized marketplace enrollment would jump by 8.0 million people nationwide and premiums would fall by 18 percent on average.
- Federal spending would increase by an estimated $442 billion over 10 years and, after accounting for increased revenues because of higher wages and some offsetting savings, the federal deficit would increase by an estimated $333 billion.