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Cancel the cowardly Times and Post and set up an equivalent monthly donation to ProPublica.

You know he’s going to shit a cat.

Since we are repeating ourselves, let me just say fuck that.

Consistently wrong since 2002

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T R E 4 5 O N

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Balloon Juice, where there is always someone who will say you’re doing it wrong.

You are here: Home / Anderson On Health Insurance / ACA subsidy schemes

ACA subsidy schemes

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The Affordable Care Act subsidy funds will likely be a source of tax cut pay-fors in a reconciliation bill that can pass the Republican controlled Congress with bare majorities.  We need to think about the ACA in three phases of affordability for subsidized enrollees.

  1.  2014-2017 Standard subsidy scheme plus direct CSR reimbursement.
    1.   This is the lowest level of subsidization and it is as the ACA was written and passed in 2010.
  2.  2018-2021 Standard Subsidy + Silverload
    1. This led to a lot of zero premium plan availability up to 210% FPL (ish) and acted as a substantial counterweight to the reduction in advertising and increased administrative burden of the Trump Administration
    2.   Silverloading is, to use a public finance framing, a poorly targeted subsidy that is mostly a transfer to inframarginal enrollees rather than an incentive to marginal enrollees.
  3.  2021-2025 ARPA/IRA subsidies
    1. Still with Silverloading but the fundamental subsidy structure is changed to much richer for people already receiving subsidies and getting rid of the 400% income ceiling.
    2.  Some states have gone through a process known as Premium Alignment to make Silverloading even bigger
    3. Zero premium available up to 250-300% FPLish

The ARPA/IRA subsidies will expire at the end of 2025.  Doing nothing is the easiest action for a Republican trifecta for this.

The next big question is the decision to pay or not pay CSR subsidies directly to insurers. This would require legislation.  It would likely county as a $200 billion dollar pay-for from the current law & policy baseline over a decade.

We are likely going to be flipping between either State #1 or State #2 in a reconciliation bill with a potential that the over 400% FPL cap is removed.  There are also chances that the original subsidy schedule (State #1) will be weakened.

 

Reader Interactions

8Comments

  1. 1.

    Tim C.

    Perhaps a stupid followup question:

     

    • What does this lead to in terms of outcomes?   Do those of us on non-ACA plans end up with spiking premiums in short order to pay for all the folks going back to emergency care instead of preventative care?
    • What happens to rules like not being able to deny coverage for pre-existing conditions?

    I know the realistic answer to the second question is “Who knows?”  but we are in for at least four years of FAFO so curious as to your thoughts.

  2. 2.

    ArchTeryx

    @Tim C.:

    1) Yes. The more people are frozen out of coverage, the more health care costs are driven up. It’s an effective shift of expenses from insurance companies to health care providers, and they respond by raising prices. Which in turn, drives up insurance premiums.

    But the right hates the ACA and wants to burn it all down, and will never stop trying. So that’s what the next four years will be like no matter how much or little damage they do: Massive health inflation.

    That’s not even getting into the effects tariffs will have on the cost of drugs. Most generics are manufactured in India. What do you think the seniors will do when a single medicine costs their entire SS check?

    2) Rules like that will be unaffected unless they’re specifically repealed. But as they did before, you leave community rating in place and degrade every other part of the ACA, the inflation in health care will quickly turn insane. Which is the whole plan: Drive prices up until the public supports the end of the ACA then repeal the whole thing.

  3. 3.

    Betsy

    Thanks for this outlook, David!

    You know SO much about this.  Congress really ought to listen to you, if they have a collective brain.  (big “if”)

  4. 4.

    Anonymous at Work

    What’s the Leopards Eating Faces impact from ARPA/IRI subsidies expiring?

    Is the loss going to destabilize insurance companies and hospitals, leading to market contraction?

  5. 5.

    Villago Delenda Est

    Get sick…just die. We don’t care who you voted for. If you’re not a billionaire parasite, you’re expendable.

  6. 6.

    Tim C.

    @ArchTeryx: All that makes sense.   Thank you.   Though I’m not sure the word “plan” is valid.  More and more it’s clear to me that the Republicans simply have nobody at the wheel.   Trump is steering things of course, but he’s not able to pay attention to the road and likely the level of chaos around him will be… informative.

     

    And agreeing with post above.  As much as I want to vent my spleen at every Trump voter, we need to tell the marginal ones, “You go lied to.”

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