President-elect Biden’s proposed $1.9 trillion stimulus package includes a provision that could result in millions more people signing up for health insurance through the Obamacare marketplaces, according to Sarah Kliff of The New York Times.
The Biden proposal would increase subsidies for consumers on the federal exchanges, providing more substantial help for low-income participants, while allowing more middle-income households to participate in the subsidy program.
Under current rules, which were crafted in part to keep the cost of the Affordable Care Act below $1 trillion, subsidies phase out for those earning more than 400% of the poverty level, which in 2021 translates to $51,520 for individuals and $106,000 for families of four. Anyone earning above that level loses the subsidies, resulting in sharply higher costs for health insurance. The Biden proposal would eliminate the income-based cutoff and use an income-based cap instead, limiting premium costs to 8.5% of income for mid-level plans.
That rule change is expected to provide considerable economic relief to households with incomes just above the cutoffs, though it’s not expected to boost enrollment significantly. However, the other part of Biden’s proposal – larger subsidies via tax credits for low-income households – could boost overall participation in the exchanges.
“Numerous academic studies show that premium subsidies are the strongest driver of health law enrollment,” Kliff wrote. “Experts say this type of large increase, directed toward low-income Americans, could drive millions more to sign up.”