Biden’s bill to help millions avoid higher health care costs

Millions of people in the United States will be spared large increases in health care costs next year after President Joe Biden signed legislation extending generous subsidies to those who buy plans through the federal and state marketplaces.

The sweeping climate, tax and health care bill sets aside $70 billion over the next three years to keep premium out-of-pocket costs low for an estimated 13 million people, just before discounted rates expire in a year marked by record-high inflation.

As the calendar neared the Nov. 1 open enrollment date, Sarah Cariano grew increasingly nervous about her job helping people across Virginia sign up for subsidized private health insurance on the HealthCare.gov website.

“I expected a very difficult conversation with people to explain why their premiums had gone up,” said Cariano, a policy specialist at the Virginia Poverty Law Center.

But the passage of the “Inflation Reduction Act” erased those concerns.

“Things aren’t going to change for the worse for people who buy coverage through the marketplace,” she said.

The bill would expand subsidies tentatively proposed last year when Congress and Biden signed a $1.9 trillion coronavirus relief bill that significantly reduced premiums and out-of-pocket costs for customers buying plans through the Affordable Care Act’s marketplace. It also continues to reduce costs for more people and families living well above the poverty line.

Only Democrats supported expanded health care subsidies and other proposals in the bill Biden signed Tuesday. Republicans criticized the measure as a major government overreach that will only worsen inflation. In reality, economists say, the bill will do little to fan or douse the flames of excessive prices.

Marketplace health insurance premiums are expected to rise significantly next year — roughly 10 percent — according to an analysis by the Kaiser Family Foundation. Expanded subsidies, which set premium payments based on income, would protect most people from those price increases, said Cynthia Cox, the foundation’s vice president.

“Generally speaking, people shouldn’t see increases in their premiums,” Cox said.

Those who bought plans on the government marketplace saved an average of about $700 in premium payments from subsidies this year, according to Centers for Medicare and Medicaid Services estimates.

As costs fell, more people signed up for coverage in the past year and the number of people without health insurance fell to a record low of 8 percent in August, the Department of Health and Human Services announced. An estimated 26 million people, 2% of whom are children, remain uninsured in the US

In California, many of the 1.7 million people who buy health insurance through Covered California, the state-run insurance marketplace, will continue to save $29 to $324 a month, depending on their income level.

State officials estimate that about 220,000 people will be saved by no pricing. Between 2 million and 3 million people in California may also turn to the state market if they lose coverage through Medicaid when the federal government’s COVID-19 public health emergency expires. About 15 million people in the U.S. received expanded Medicaid coverage during the pandemic.

Cost is the biggest factor in whether or not a person signs up for coverage, said Joseph Poindexter, senior director of health insurance programs at HealthCare Access Maryland.

Some parents, for example, enroll their children in Medicaid but fail to buy coverage for themselves, he said.

“It’s really telling to see people who will say I’m going to give up treatment or I’m not going to see a doctor,” Poindexter said.

Fewer people had to make that calculation with the subsidies, Poindexter said, attributing the lowered prices to a 9 percent increase in new enrollments in the state last year.

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