Many families with children faced precarious health care access and affordability as the COVID-19 pandemic and resulting recession took hold in 2020, and numerous families experienced additional economic and health challenges in the ensuing months. The American Rescue Plan Act (ARPA) included temporary changes to the premium subsidy schedule in the Affordable Care Act (ACA) Marketplaces aimed at improving the affordability of health insurance coverage. Making these changes permanent could benefit children if they gain coverage or if their parents gain coverage or experience premium or out-of-pocket (OOP) cost savings. In this brief, we use the Urban Institute’s Health Insurance Policy Simulation Model to consider the impacts of extending the enhanced subsidies on all children and their parents and children under age 6 and their parents in 2022.
We find that nearly 1 million uninsured children and parents, including approximately 300,000 uninsured children, would gain insurance coverage if ARPA subsidy enhancements were made permanent. Though only about 67,000 children under age 6 would gain coverage, approximately 267,000 uninsured parents who would gain coverage have a child under age 6, suggesting even more young children could benefit when their parents gain coverage. Nearly two-thirds of the coverage gains for families would be concentrated among children and parents with incomes between 200 and 400 percent of the federal poverty level (FPL). In addition, approximately 4.5 million children and parents who had nongroup coverage before the ARPA would experience combined household premium and OOP spending reductions of 18 percent per person, on average; those with incomes below 200 percent of FPL would save even more, 25 percent per person.
Nonetheless, we project that about 3.3 million children and 6.3 million parents would remain uninsured in 2022. Most remaining uninsured children would be eligible for Medicaid or the Children’s Health Insurance Program (57.2 percent) or tax credits (13.6 percent). But about 41.2 percent of parents would be ineligible for subsidized coverage because of their immigration status or residence in a state that has not expanded Medicaid under the ACA; this represents approximately 2.6 million parents, including 636,000 uninsured parents who would become eligible for Medicaid if their state were to expand Medicaid under the ACA.