Now that the Senate has passed the American Rescue Plan, we can be very confident that sometime in the next week or so the ARP will be showing up at the White House’s door step ready to be signed.
One of the big pieces of the ARP is a 2 year update of the ACA subsidy table. There are two major things going on in the update.
- Everyone will now be eligible for subsidies if the benchmark silver plan costs more than 8.5% of their income
- Subsidies for everyone who currently gets a subsidy will increase
Point 1 is mostly aimed at upper middle class families. Senator Cassidy (R-LA) consistently told a story about a Louisiana radio host and his wife who were both in their mid-50s and had 2 kids in their late teens/early twenties including one with a significant pre-exisiting condition. This family earned over the subsidy cap and was paying $40,000+ a year in premiums. This family will see massive relief in April or May once this gets operationalized.
Point 2 is aimed at making the currently subsidized significantly better off. Zero premium plans will be way more common. Everyone earning under 150% FPL will now see two Silver plans with 94% Actuarial Value (low deductible) plans whose core benefits will cost them nothing. Most people earning well over 250% FPL will see at least one Bronze plan with a zero dollar premium plans. Zero dollar Gold plans on Healthcare.gov will be available to single 40 year olds earning over 200% FPL in all of North Dakota, Wyoming and big chunks of the Great Plains and a little bit of North Carolina. At that income level, gold beats silver with CSR on both price and cost-sharing.
There are a lot of other moving parts in the ARP but this is what I’m focused on right now.
Tableau with changes below the fold