Joe Biden’s American Rescue Plan made health insurance free for millions

Ruben Onsu

After the passage of President Joe Biden’s first Covid-19 relief plan, nearly 7 million uninsured Americans now qualify for free health insurance through the Affordable Care Act, according to new federal projections shared exclusively with Vox. The American Rescue Plan (ARP), which takes effect on Thursday, expanded eligibility for the […]

After the passage of President Joe Biden’s first Covid-19 relief plan, nearly 7 million uninsured Americans now qualify for free health insurance through the Affordable Care Act, according to new federal projections shared exclusively with Vox.

The American Rescue Plan (ARP), which takes effect on Thursday, expanded eligibility for the Affordable Care Act’s premium subsidies — federal aid to help people pay for insurance plans bought on the individual marketplace. It also made the subsidies more generous for the people who already qualify for them. It expanded the number of people currently without any insurance coverage who could enroll in a plan for free.

Roughly 29 million people currently living in the US lack health insurance. According to the new HHS estimates, at least 6.8 million of them could now purchase an ACA plan with no monthly premium, and another 1.3 million could sign up for a health plan that costs less than $50 a month. Many of those people already qualified for free or low-cost coverage prior to the ARP, but based on the federal projections, the new law’s expansion of the ACA made an additional 2 million Americans eligible for free or cheap coverage.

A low premium is no guarantee that a plan’s out-of-pocket costs will also be low enough for people to find it affordable. But about 1.9 million people with incomes between 100 and 150 percent of the poverty level can get insurance with no monthly premium that will cover 94 percent of their medical costs, according to federal estimates. And about two-thirds of uninsured Black and Hispanic/Latinx Americans, who are less likely to have coverage than their white peers, qualify for zero-cost coverage.

“President Biden promised to bring down health care costs, and by implementing the American Rescue Plan, this administration is delivering,” HHS Secretary Xavier Becerra said in a statement. “People deserve the peace of mind that comes from knowing you can take care of your health without going into debt.”

The challenge will be in enrolling those people. It’s been a longstanding problem that many uninsured Americans already qualify for assistance but haven’t signed up.

The Biden administration is giving itself a big window to reach them. Enrollment will be open on HealthCare.gov and most state insurance marketplaces until August 15. HHS is doubling its new advertising campaign to support open enrollment, from $50 million to $100 million. It is contacting people who have previously started the enrollment process but for whatever reason never finished it and engaging with community groups to contact the uninsured.

The US isn’t going to reach full universal coverage without another bill more ambitious than the American Rescue Plan. But that legislation, and its promise of free health insurance for millions, could go a long way toward bringing down the uninsured rate in the near term — if people hear the message.

Joe Biden is stretching Obamacare as far as it can go

The Affordable Care Act is now, arguably for the first time, fully operational.

The American Rescue Plan made 3.7 million more people eligible for the health care law’s premium subsidies. The Biden administration already opened up enrollment after taking office, and 200,000 Americans signed up in the first two weeks. The administration has since extended enrollment until August 15, backed by millions of dollars in advertising.

Insurers are expanding into new markets. The individual mandate is gone, but, as it turns out, it may not be as important to the law’s long-term viability as originally thought. This is a new beginning of sorts.

“The ACA is right now much closer to what its advocates hoped it would be from the start,” Larry Levitt, executive vice president at the Kaiser Family Foundation (KFF), told me earlier this week. “This is a true test of how effective a juiced-up ACA can be at getting us closer to universal coverage.

Taken together, come Labor Day, the country should have the clearest idea yet of how the ACA functions at full strength — and where holes in the US health system remain.

A big contributor is Biden’s ARP, which eliminated the cap on eligibility for premium subsidies. Before the ARP, people making more than 400 percent of the federal poverty level (about $51,500 for an individual or $106,000 for a family of four) could not receive federal assistance. The new law has lifted that cap so that nobody will pay more than 8.5 percent of their income toward their health insurance.

The Kaiser Family Foundation released new estimates of how the law would affect health coverage and found that change will make an especially big difference for the people who were making just a little too much money to qualify, those in the 400–600 percent range. About 2.4 million people in that income bracket will be eligible for subsidies. A lot of people making more money than that may already be paying 8.5 percent of their income or less for insurance, no matter how expensive it is, but another 1 million or so people with those higher incomes will now qualify for assistance too.

In chart form, the difference between the pre- and post-ARP versions of the ACA is best represented by the green bars on the right. Those are the newly eligible people.

Kaiser Family Foundation

Not only does the American Rescue Plan make more people eligible, the law also increased the size of the subsidies that people receive. The light-blue bar in the chart below illustrates how much the new subsidy will contribute to a person’s premiums. For the Americans who make less than 150 percent of the poverty level, the federal government is covering a $500 monthly bill for their health insurance.

Kaiser Family Foundation

So millions of people are newly eligible for subsidies and millions more now qualify for more generous subsidies. In fact, according to Kaiser’s estimates, a majority of the 29 million uninsured people in the US already qualify for either ACA subsidies or Medicaid.

Kaiser Family Foundation

But, obviously, they haven’t signed up. This has actually been a longstanding problem: Millions of people are eligible for health care assistance but, for whatever reason, they don’t take advantage of it. (Surveys suggest a lot of these folks don’t know they qualify for help.)

This is where Biden’s extended enrollment period and advertising blitz come in. Shortly after taking office, Biden announced a special ACA enrollment period from February 15 to May 15. Then last week, the administration said they would extend that enrollment period until August 15. That gives them five months to try to reach as many of those 29 million as they can.

The Biden administration is giving itself a lot of time and money to try to cover more Americans. This might also be the best avenue to expanding coverage during Biden’s presidency if a public option can’t pass the Senate. (They’d also need to make the new ARP subsidies, currently set to expire in two years, permanent at some point.)

It won’t be easy. The remaining uninsured are uninsured for a reason: They are generally less tied to the institutions and communities that might connect them to health coverage.

But the renewed optimism around the ACA is real. Look no further than the health insurers themselves. Cigna is reportedly planning next year to double the number of markets where it’s selling ACA plans. It makes sense: The ACA market is now almost as profitable for health insurers as the high-margin Medicare Advantage market.

Some uninsured people won’t be covered anytime soon. Democrats tried to entice more states to expand Medicaid through ARPA and, while it appears Republicans in Alabama and Wyoming may be receptive to their offer, the biggest non-expansion states do not appear to be swayed. Two million or so Americans living in poverty will remain without coverage. The nearly 4 million people currently ineligible for assistance because of their citizenship status also won’t be helped by the ARP or Biden’s advertising campaign.

The US health system will still be in need of repairs this fall. But in the meantime, Biden is giving a newly improved version of Obamacare a chance to stretch itself as far as it can go.

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