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Subsidies have boosted Affordable Care Act’s enrollment. It’s setting up a potential fight

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February 18, 2023
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Subsidies have boosted Affordable Care Act’s enrollment. It’s setting up a potential fight
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Health insurance sign-ups through the Affordable Care Act (ACA) jumped by nearly 2 million during the most recent enrollment period, which ended in mid-January, totaling 16.3 million people.  

The gains suggest the program known as Obamacare is going strong, despite repeated efforts by Republicans to kill it.  

It also suggests subsidies provided to the program through two massive pieces of legislation spearheaded by President Biden had an influence. The subsidies were established by the American Rescue Plan in 2021 and subsequently extended through the Inflation Reduction Act. 

“It really speaks to the improved affordability of ACA Marketplace plans. The expanded subsidies made ACA Marketplace plans a whole lot more affordable and attractive for people,” Krutika Amin, associate director at the Kaiser Family Foundation (KFF), told The Hill. 

The potential problem down the road for the Affordable Care Act is that these critical subsidies are set to expire in 2025 and would have to be renewed by Congress in order to continue.

Both the White House and Democrats in Congress have called for the subsidies to be made permanent, but Republicans are likely to oppose those efforts.

That sets up a battle within next year’s race for the White House and the congressional majorities.

Republicans on the House Budget Committee recently proposed cutting these subsidies to help address the nation’s debt. A change like this could impact future enrollment, casting a shadow on the expanded access to health care the Biden administration has included among its hallmark achievements. 

In its proposal, the House Budget Committee suggested capping ACA subsidies to 400 percent of the poverty level and below, essentially returning to the original standards set by the ACA. The panel estimated that “recovering overpayments” could save the government $65 billion. 

Whether a GOP majority would actually move forward with such a proposal is a real question, say some analysts.

“I’m kind of skeptical about this precisely because this is something that the budget committees do every year. It doesn’t represent necessarily something that the Republican majority would support generally speaking. It’s a starting point for some kind of a discussion,” Joseph Antos, a health policy analyst at the conservative think tank American Enterprise Institute, told The Hill.

Antos noted the Republican Study Committee made no mention of reducing ACA premium subsidies in its proposed alternative budget for 2023, with the plan mostly focusing on regulatory changes to the program.

Ending the subsidies would be a politically fraught endeavor, especially with the program’s expanded use and popularity.

“The old saying is that once you’ve handed somebody an entitlement, you can’t take it back. And that’s what the ACA is,” said Antos. “It’s very difficult for a politician to actually take a cut in anything that directly affects voters. It really doesn’t matter whether you think that the people who are benefiting most are more likely to vote Democrat or Republican. It leaves a bad taste in everybody’s mouth.”

Amin from KFF noted that the income limit for subsidies proposed by House Republicans would set a cutoff at a little over $54,000 in 2023. 

“If that does happen, where ACA subsidies are once again capped up to that income level, then some people — particularly middle-income people and older people — will have to pay a lot more for easy marketplace plans,” Amin said. 

Amin gave the example of a 60-year-old individual making about $55,000 annually. With the current subsidies, such an individual would pay about 8 1/2 percent of their income for a Silver health plan, a mid-level plan available through the Marketplace. 

“If the GOP proposal to cap the subsidies … moves forward, the 60-year-old would have to pay over 20 percent of their income on average in some states,” said Amin. 

While he did not touch on this specific proposal, Biden made it clear during his State of the Union address last week he would veto any legislative attempts by Republicans to drastically change the health care landscape, including access to abortion at the federal level and potential cuts to Medicare.

Apart from the subsidies, administration officials and health care stakeholders also attributed the boost in enrollment to concerted efforts on outreach and awareness. 

Liberal health care advocacy group Protect our Care cited the administration’s investment into the ACA’s Navigators program as another reason for the increasing enrollment numbers. Navigators are essentially ACA enrollment advisers who are tasked with raising awareness of Marketplace plans and assist consumers in preparing their applications. 

“The nation’s uninsured rate is at the lowest it has ever been in history,” Protect our Care said in a statement. “We’re finally starting to reach the true potential of the Affordable Care Act, and you see that reflected in the enrollment numbers. The lesson here is that the American people want us to keep pushing these policies forward until we ensure that everyone has the care they need to thrive.” 

A spokesperson for the Centers for Medicare and Medicaid (CMS) echoed these sentiments, saying the level of outreach had risen to an “unprecedented scope and scale” this past year. 

“Enrollment outreach included investments to reach multiple audiences that experience lower access to health care. CMS has partnered with cultural marketing experts, for example, to deliver strong campaigns to African Americans, Spanish and English-speaking Latinos, and Asian American and Pacific Islander communities in multiple languages,” the spokesperson said.

CMS invested nearly $100 million in grant funding to 59 Navigator organizations for this year’s enrollment period, another record amount according to the agency’s spokesperson. 

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