Impact of the American Rescue Plan on Healthcare for Older Adults & Their Employers
Now that it’s confirmed, the new American Rescue Plan, passed by the Biden Administration, contains a list of social safety net expansions, including those that affect employer-based healthcare. Older American’s can expect to see a bit more flexibility and relief of healthcare costs, reducing the burden on their employers.
COBRA
The relief fund will allow for people who have been laid off to purchase health insurance from their employer. Previously, the individual would be responsible for paying the total cost of the health plan, but the new plan will pay for 85% of the plan cost. This support will end in September 2021.
ACA Exchange premiums and subsidies
The changes in the ACA will increase access among those most in need. This slight expansion of the ACA would allow for people who are at or below the Federal Poverty Line (earning less than $19,320 a year) would no longer be required to pay the 2% income threshold to enroll in a plan. This means that they would not be required to pay part of their income, as the new premium would be $0. The new bill also eliminates the “subsidy cliff” that cuts people off when they hit a certain income threshold and leaves them to foot the bill for their health plan. The new bill limits the premium that this group of people have to pay resulting in a gradual decrease in the subsidy as income rises.(Frieden, 2021)
A “repayment holiday”
Everyone who used the advance tax credit in 2020, estimating their income for the year. Many people estimated their income too low and will receive the balance in 2021. In the Bill, there’s a provision: "People can still claim additional credits if those are due, but if their income bounced around and they earned more than projected, they don't have to repay" the extra tax credits.(Frieden, 2021) One aspect to pay attention to: if a person received as little as 1 week's worth of unemployment insurance, any income above 138% of the poverty level would be disregarded when calculating eligibility for tax credits. The Senate version of the bill also includes a similar provision for calculating cost-sharing subsidies.(Frieden, 2021)
Healthcare for Older Americans
Older people seem to be suffering the worst when it comes to premiums. The threshold for unemployment pays extremely high premiums in comparison to their income. Members of this group are mostly older, as indicated by the age-ratings: "The premiums for a 60-year-old, for instance, might suck up 20% to 30% of their income without assistance ... so if you imagine 20% to 30% of your income is going toward that, that could make it hard to pay other expenses. So that's what this bill does, and I think it's squarely related to the pandemic."(Frieden, 2021)
According to the New York Times, “The Congressional Budget Office estimated that a 64-year-old earning $58,000 would see monthly payments decline from $1,075 under current law to $412 because the federal government would take up much of the cost.” (Stolberg, 2021)
The bill however does not touch Medicare directly, but there are discussions about the Bill’s implications on Medicare spending in subsequent years, and how it affects physician practices. There was an indication that the expansion of the ACA marketplace could accommodate an expansion of people buying into Medicare, but nothing has come forth. (Sarlin, 2021) Advocates for Medicare For All actively express its ability to accommodate a large number of American’s that just lost private healthcare. (Stolberg, 2021)
It’s important to keep in mind that each state is responsible for opening their ACA marketplaces. Enrollment is entirely up to the capacities and organization of the State systems. As people are enrolled, left behind will be people who will qualify for subsidies and other benefits that grant them access to the health exchange. (Frieden, 2021) As for Medicare for All, the Biden Administration voices it’s support for a mix of public and private options on the Government-run marketplace, although only private options are currently available. (Stolberg, 2021)
Citations:
Frieden, J. (2021, March 05). COVID relief bill contains lots of healthcare provisions. Retrieved March 19, 2021, from https://www.medpagetoday.com/infectiousdisease/covid19/91512
Sarlin, B. (2021, March 03). Obamacare would get a big (and Quiet) overhaul in the covid relief bill. Retrieved March 19, 2021, from https://www.nbcnews.com/politics/congress/obamacare-would-get-big-quiet-overhaul-covid-relief-bill-n1259343
Stolberg, S. (2021, March 09). Pandemic relief Bill Fulfills biden's promise to EXPAND Obamacare, for two years. Retrieved March 19, 2021, from https://www.nytimes.com/2021/03/08/us/politics/obamacare-biden.html