This report examines the effects of reforms that could be next steps to increase health care coverage and affordability after the passage of the Inflation Reduction Act of 2022. The Inflation Reduction Act (IRA) extended the enhanced premium tax credits enacted under the American Rescue Plan Act until 2025, and we examine five additional reform policies:
- Implementing ACA Marketplace expansion to fill the “Medicaid gap” in the 12 states that have not expanded Medicaid eligibility to adults with very low incomes
- Lowering the employer-sponsored insurance affordability threshold to 8.5 percent of income
- Establishing a $10 billion federal reinsurance fund
- Fully federally funding Medicaid expansion
- Enhancing Marketplace cost-sharing subsidies
Of these, filling the Medicaid gap and enhancing cost-sharing subsidies would have the greatest effects on both coverage and costs. If all policies were enacted, almost 3.7 million more people would have comprehensive health coverage in 2023. The number of people without comprehensive insurance would fall by 13 percent. New federal spending that year would be just over $50 billion, but states and households would save and employers would spend less on premiums.
The report also presents 10-year projections of the reforms’ effects on federal spending and the deficit compared with a baseline of permanent IRA tax credits as well as estimates of changes to uninsurance by race or ethnicity.