A key provision of the American Rescue Plan will make premiums in the Affordable Care Act plans available in Pennsylvania more affordable by making price breaks available to more than 100,000 more people.
There are already about 340,000 people in Pennsylvania enrolled in health coverage created by the Affordable Care Act -- plans designed for people who make too much to qualify for Medicaid but don’t have access to insurance through their employer. About 86% of the people who bought ACA plans through the state’s marketplace got some financial assistance even before the expansion created by the American Rescue Plan, according to data provided by Pennie.
These federal moves come as there’s new evidence of how serious a problem health care affordability remains for many Pennsylvanians, said Antoinette Kraus, director of the Pennsylvania Health Access Network (PHAN).
Surveys conducted for her organization found that concerns about health care affordability run the gamut from worries about health insurance costs, to out-of-pockets costs and the cost of prescription drugs, she said.
“Six in 10 rural adults experienced health care affordability issues in the past year, compared to about five in 10 in other parts of the state,” she said. “We know that the rural population in Pennsylvania tends to be older and often have more health care issues.”
Kraus said people in those situations often delay care, there’s more consolidation decreasing the number of providers and putting a lot of rural health care providers on the edge which impacts health care across the region.
According to the survey released by PHAN:
Forty-four percent of Pennsylvania adults encountered one or more cost-related interruptions to getting health care during the prior 12 months, including:
- Skipped needed dental care -- 27%
- Delayed going to the doctor or having a procedure done -- 26%
- Cut pills in half, skipped doses of medicine or did not fill a prescription -- 22%
- Avoided going to the doctor or having a procedure done altogether -- 21%
That same survey found that 10% of the people contacted reported they’d been badgered by a collection agency over a medical bill and 8% said they’d used up most or all of their savings to cover the cost of a medical bill.
The changes provided by the American Rescue Plan will represent “a big shift” in making premiums more affordable, she said.
The price breaks offset much of the disparity in the normal cost of insurance premiums, which can be higher in rural parts of the state than in urban and suburban areas.
Without the price breaks, in north central Pennsylvania, the average premium for ACA health care is $874 a month, compared to $515 a month in southwestern Pennsylvania.
The price breaks link the insurance cost to the household’s income so the original sticker price of the insurance doesn’t matter, said Zachary Sherman, executive director of Pennie, Pennsylvania’s marketplace for Affordable Care Act plans.
“Where you live kind of goes out the window, because in terms of eligibility for financial assistance, it's just based on your income and your household size,” Sherman said.
“Nearly nine out of 10 of our customers receive financial assistance. And it's really significant. It's, on average, it's about $515 in savings per month that our customers get,” he said.
The enrollment period for ACA plans is in the fall but earlier this year, in one of his first acts, President Joe Biden signed an executive order that opened a window for enrollment for the ACA plans this spring. That open enrollment period continues until May 15.
Under the previous limits, price breaks were only available if the family had income below 400% of the federal poverty level, which advocates described as a “subsidy cliff.”
The rescue plan levels that cliff by eliminating the 400 percent income cap and instead tying eligibility to the cost of the insurance compared to the family income — the family becomes eligible for the health premium price breaks as long as their health insurance premiums exceed 8.5 percent of their income, regardless of how much income the family has.
“Through this bill, marketplace premiums will be capped at 8.5 percent of a household’s income for 2021 and 2022. Many individuals currently receiving subsidies will pay even less in premium, and anyone who became or will become eligible for unemployment income at any time throughout 2021 will be eligible for coverage with a $0 premium for 2021,” said Jessica Altman, Pennsylvania Insurance Commissioner.