On January 27, 2021, President Biden announced the COVID Special Enrollment Period (SEP), allowing any eligible consumer to enroll in an Affordable Care Act (ACA) Exchange plan through August 15, 2021. In March, the ACA’s premium subsidies were increased under the American Rescue Plan Act (ARPA) allowing individuals and families earning more than 400 percent of the Federal Poverty Level (FPL) to access a premium subsidy, albeit only for 2021 and 2022. These two important policy changes that were made in early 2021 led to a record 14.5 million consumers enrolling in an Exchange plan during “open enrollment” 2022.
So, What Happens Now?
The Biden Administration and Congressional Democrats recognize that the record 14.5 million Exchange enrollment was driven by:
- The 2.5 million consumers that enrolled during the 2021 COVID SEP (and who were ultimately re-enrolled during open enrollment 2022)
- Millions more who were attracted to the ACA Exchanges on account of the increased subsidies.
However, the COVID SEP is over, and without an extension, the enhanced premium subsidies will go away at the end of 2022. The Biden Administration and Congressional Democrats are seeking to extend the enhanced premium subsidies, at least through 2025, although a longer extension is possible. But nothing will be possible if Congressional Democrats are unable to move legislation that would extend the enhanced premiums subsidies.
As we have previously discussed, extending the enhanced premiums subsidies is a key part of the Build Back Better Act (BBBA), legislation Congressional Democrats have been trying to get to the President’s desk over the last six months of 2021. However, Congress has not been able to agree on the BBBA as drafted.
Can the BBBA be revived?
Not in its current form, but we could see a “skinny” BBBA re-surface in March. This “skinny” BBBA will likely include drug pricing reforms and corporate and international tax changes to fund:
- free pre-K and other child and elder care services
- climate change reforms
- extending the enhanced premium subsidies
- Medicaid redeterminations not tied to the end of the public health emergency
If the enhanced premium subsidies are ultimately extended, the Congressional Budget Office (CBO) has indicated that we could see millions more consumers enrolling Exchange plans, on top of keeping the existing record number of Exchange enrollees. If this “skinny” BBBA fails – and Congressional Democrats are unable to extend the enhanced premium subsidies on a stand-alone basis or through some other legislative vehicle – then it is logical to conclude that Exchange enrollment will retreat. Maybe not in 2023, but certainly in future years as those consumers who benefited from low-cost – and even $0 monthly premiums – will find it difficult to continue to afford health coverage.
As always, we will continue to follow the efforts to extend the enhanced premium subsidies, including the upcoming debate over a “skinny” BBBA. Stay tuned…