Apr 5, 2022 - Health

Biden's Affordable Care Act lifeline

Illustration: Aïda Amer/Axios

President Biden, joined by former President Obama, on Tuesday will announce regulatory changes to Affordable Care Act rules that could make health insurance more affordable for millions of Americans.

Yes, but: The announcement comes amid significant doubt about whether Congress will be able to prevent millions of current ACA enrollees from seeing large premium hikes next year — or from losing their insurance altogether.

Driving the news: The administration is closing what's known as the "family glitch," which stems from part of the health law that deals with eligibility for premium subsidies and ultimately prices some families out of health insurance.

  • Under current regulations, people who are eligible for "affordable" employer health insurance aren't eligible for premium assistance on the ACA marketplaces.
  • The Obama administration defined affordability as the premium for a single beneficiary — the employee — being below a certain percentage of family income. That doesn't take into account the higher cost of adding dependents to family coverage.
  • The Biden administration is changing the definition and tying the eligibility threshold to the price of family coverage, which it says will lead to hundreds of thousands more Americans gaining coverage and more than a million spending less on premiums.

Biden will also sign an executive order today directing agencies to continue finding ways to make coverage more affordable.

The other side: The policy is one of the largest regulatory changes to the ACA to date. But the biggest legislative change so far — the subsidy enhancement Congress passed last year — is set to expire at the end of this year, which would reverse progress made on coverage and premium costs.

  • HHS estimated last month that 3 million people will lose coverage if the policy expires, nearly 9 million would receive lower subsidies and 1.5 million would lose their subsidies entirely but remain insured.

What we're watching: Congressional Democrats still have time to revive the sweeping social policy legislation containing the bulk of Biden's domestic agenda, including an extension of the enhanced subsidies.

  • But even if the bill comes back to life, it's an open question what it will contain. The consequences of dropping the ACA piece make it a likely bet for inclusion.
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