Permanent fixes to the ACA are still needed after the COVID-19 rescue package

The Affordable Care Act (ACA) expanded health insurance to over 20 million Americans, but COVID-19 has highlighted remaining shortfalls of the nation’s health care system. 

Millions are uninsured during the pandemic and massive layoffs have led to even more people losing employer-based insurance. With these shortcomings in mind, it is reassuring that legislation aimed to help people get health insurance coverage and make it more affordable is being included in the American Rescue Plan Act now being considered by Congress. 

The Senate passed the rescue package on Saturday and it will return to the House for a final vote this week. It includes extra financial help during the pandemic to lower premiums for people buying coverage through the ACA marketplaces. The extra financial help will automatically lower premiums for millions of people already eligible for some help and extend financial relief for middle-income people currently ineligible for assistance.

But the temporary increase in help provided by this bill should be considered step one in the health reform process. Ensuring affordable health care for all requires permanent strategies for lowering household costs and for reaching the millions of low-income people in states that have refused to expand Medicaid to help their residents. Permanent health care reforms can also promote a strong national economic recovery post-pandemic.

The House bill includes critical steps to temporarily fill gaps in the ACA

The House COVID-19 relief bill, promoted by the Biden administration, would temporarily lower household premiums for those enrolling in marketplace coverage. Since the administration has already started a marketplace special open enrollment period, people without coverage today or people in plans that were sold to them outside marketplaces would be able to take advantage of this insurance fire sale. 

The bill would also provide new subsidies for people who lose employer insurance when losing their job, covering most of the cost of keeping that same coverage (known as COBRA) during the COVID-19 crisis. Subsidizing COBRA allows people to keep their doctors and avoid losing progress made toward paying their employer plan’s deductibles and out-of-pocket maximums, which are important benefits for the sickest people. However, because employer coverage tends to be more expensive than standard marketplace coverage, COBRA subsidies would be more expensive too.  

Families affected by the economic fallout of the pandemic struggle with many needs, from securing unemployment benefits, childcare, food assistance and addressing housing issues. Keeping health insurance may not have been the top priority for many families when the crisis struck, but it is a fundamental need, particularly during a public health emergency. Providing additional help to make health insurance affordable was not part of the first COVID-19 relief package. If passed and signed into law by President Biden, the health insurance components of the new House bill would reduce health care costs for millions of people already insured while decreasing the number of people with no health insurance at all. 

Americans need permanent solutions that make health care more affordable and accessible

Temporary improvements to the ACA are just step one. Step two should permanently connect the House bill’s higher premium subsidies to higher value plans that would decrease households’ out-of-pocket costs (deductibles, coinsurance and copayments). Such help is particularly important when people have significant health care needs since high out-of-pocket costs can make it difficult for low- and middle-income people to get the medical care they need. 

Plus, 12 states have refused to expand Medicaid eligibility for many of their lowest income citizens, essentially branding them as too poor to qualify for any help paying for health insurance. The federal government can fill in this gap by making these vulnerable Americans eligible for generous marketplace subsidies, a step that would address a massive inequity in our current health insurance system. This step could also include cost-containment strategies to address the high prices paid to health care providers in some areas, particularly rural areas and those plagued by insurer or healthcare provider monopolies.     

Temporary improvements to the ACA, like the ones included in the “rescue” bill, are an essential down payment on broader, permanent strategies that are still necessary to improve the health care system. After 10 years of debating the ACA, building on and improving the law and our health system can finally fulfill the promise of affordable health care for all Americans. 

Linda J. Blumberg is an institute fellow in the Urban Institute’s Health Policy Center. She is an economist who has studied the Affordable Care Act as well as challenges and proposed reforms to it extensively.