AHA, AMA, AHIP and others support permanent extension of ACA tax credits

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The American Hospital Association has joined the American Medical Association, AHIP and other healthcare organizations in drafting a letter to congressional leaders supporting a permanent extension of tax credits under the Affordable Care Act.

The signees, which also include the Blue Cross Blue Shield Association, Federation of American Hospitals and the American Academy of Family Physicians, agreed that Americans should have a stable healthcare market with access to high-quality and affordable coverage.

“Achieving universal coverage is particularly critical as we continue managing the COVID-19 pandemic and work to address long-standing inequities in healthcare access and disparities in health outcomes,” according to the letter.

WHAT’S THE IMPACT

During the course of the pandemic, many Americans purchased ACA plans on the federal and state-based marketplaces, prompting Congress to pass the American Rescue Plan, which included provisions to make ACA plans more accessible and affordable. 

Specifically, the letter said, the ARP expanded access to the ACA’s advanced premium tax credits by guaranteeing that no one will spend more than 8.5% of their income on health insurance premiums, and making the credits more generous for lower income families. 

Data from the Department of Health and Human Services shows that families with income between 100-150% of the federal poverty level were made eligible for $0 premium benchmark silver plans.

Upwards of 14.5 million Americans accessed these expanded tax credits by enrolling in marketplace coverage during the 2022 open enrollment period; of them, 3 million were new consumers and 3.2 million chose plans with a monthly premium of $10 or less.

The ARP’s expanded tax credits, however, are slated to expire on December 31.

“If Congress allows this deadline to pass, the lowest income enrollees could see their premiums increase from less than $1 per month to $26 per month (2,500%) while the highest income enrollees could see their premiums increase from $425 to $577 (36%),” the signees wrote. “Enrollees with income above 400% FPL will no longer qualify for tax credits at all.”

This, the organizations said, would cause coverage to become unaffordable, forcing people to drop marketplace coverage. Many would remain uninsured.

Thus the call for Congress to make the tax credits permanent, which the groups said would result in much greater stability for both patients and those who provide and pay for healthcare services.

“Our country continues to work through the economic and public health implications of COVID over the past two years, including rising inflation which is forcing families to pay more at the grocery store and the gas pump,” the letter read. “We cannot add to these burdens by putting the healthcare of 14.5 million current marketplace enrollees, and millions of potential future enrollees at risk. 

THE LARGER TREND

During the first 12 months of President Joe Biden’s administration, close to 6 million new consumers signed up for coverage through the federal marketplace during the open and special enrollment periods, according to data published in March by the Centers for Medicare and Medicaid Services.

The U.S. Department of Health and Human Services has credited the enrollment growth in part to investments made through the American Rescue Plan (ARP). The agency said 2.8 million more consumers are receiving tax credits in 2022 compared with last year. 
 

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