With the American Rescue Plan (ARP) set to expire at the end of this year, Covered California continues to urge federal action to extend ARP subsidies before renewal and open enrollment periods begin. An updated analysis by Covered California states that an estimated 220,000 Californians could become uninsured as ARP’s increased and expanded federal financial assistance ends.
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“The American Rescue Plan’s financial help is a lifeline for millions of Americans, keeping health insurance more affordable and within reach,” said Jessica Altman, Executive Director of Covered California in a news release. “Millions of Americans are counting on Congress, as cutting the financial help that the law provides means many families will face the difficult choice of becoming uninsured and rolling the dice if they get injured or sick.”
Covered California estimates that nearly 1 million low-income Californians will see their premium costs double after the ARP expires. For the lowest-income Californians (those making below 250% of the Federal Poverty Level (FPL)), average net premiums are estimated to increase from $65 to $131 per month.
“The American Rescue Plan lowered premiums and boosted enrollment among all income brackets and ethnic groups,” Altman continued. “In the absence of federal action to extend these policies into 2023 and beyond, the gains we have made as a state and as a country will be at risk.”
Middle-income Californians (those making over 420% of the FPL) would once again face the “subsidy cliff” and no longer be eligible for federal financial assistance for health insurance. According to the analysis, nearly 150,000 of these Californians will see an average premium cost increase of $272 per month due to ARP subsidies expiration, and any rate increases for 2023 will increase these premium costs even more.
According to Covered California, ending these increased subsidies would have a disproportionate impact on communities of color, whose enrollment increased significantly during the pandemic. For African Americans, Covered California saw a 56% increase in enrollment between 2020 and 2022; for Latinos, Covered California saw a 34% increase in enrollment; and for Asian Americans/Pacific Islanders, Covered California saw a 21% increase.
Covered California says that in order to avoid disruption to the upcoming renewal period in October and the start of open enrollment in November, federal action to extend ARP subsidies should happen before August.
“Covered California stands ready to move mountains if Congress elects to extend the American Rescue Plan’s subsidies, but every single day matters,” Altman said. “The longer we go without a decision, the harder it will be to implement a new subsidy structure and avoid consumer confusion.”