As President Biden becomes the next President of the United States, we are starting to get a glimpse of the agenda when it comes to health insurance.

President Biden has strong support for the Affordable Care Act, and every indication is that support will continue under his presidency. The recent proposal called the American Rescue Plan provides an outline to increasing access to health insurance and medical services.

The impacts of the COVID pandemic many Americans have lost access to employer-sponsored health insurance. President Biden is calling on Congress to subside COBRA premiums until the end of September 2021. The federal government would cover 100% of the cost for employees that lost employment but wish to continue their employer group health insurance.

This is not a new concept and was first used during the 2008 financial crisis. At that time, employers paid the Cobra premium and then deduct that cost from their federal tax liability.   Fast forward to 2021, and this prevents people from moving to the marketplace even if they qualified for assistance because the COBRA would have no monthly cost.

The American Rescue Plan also looks to expand and increase the premium tax credit on the health insurance marketplace.  Those who qualify for assistance would not pay more than 8.5% of their household income towards health insurance premiums.  Under the ACA, household income has to be below 400% of the federal poverty level to qualify for premium assistance. It’s not clear in the American Rescue Plan outline if that 400% FPL threshold would change.   If there are changes in the requirements to qualify for premium assistance, this could have a considerable impact on the health insurance markets.

When the Affordable Care Act was first launched, small companies had an enormous shift and how they offered insurance benefits.  Most companies with less than 20 employees dropped their group health plans and moved their employees to the individual marketplace.  When the individual marketplace collapsed from a network access standpoint and large increase, the small employer moved back to the group health plans. If more employees can qualify for premium assistance, we could see another shift away from employer-sponsored health plans.

We will not know the true impacts on health insurance until the details are released on the American Rescue Plan, but it is fair to say that we see more government support of the Affordable Care Act.