The U.S. Senate’s passage of the Inflation Reduction Act Sunday extends subsidies for millions of Americans who buy individual coverage under the Affordable Care Act known as Obamacare.
These subsidies, which had been temporary since the passage of the American Rescue Plan Act last year, increased the financial assistance to those already eligible to buy health insurance under the ACA and also expanded such subsidies to even more largely middle class Americans who “were previously priced out of coverage,” a Kaiser Family Foundation analysis shows.
This bill will “save millions of people an average of $800 a year on health insurance premiums,” said Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services. President Joe Biden is expected to sign the legislation once it passes the House.
The three-year extension of the subsidies, which is expected to pass the Democratic-controlled U.S. House of Representatives later this week, is not only good news for the record number of Americans who buy coverage under the ACA but the health insurers who sell it. The tax credits were slated to expire this year, impacting 2023 benefit plans, health insurers said.
“Every American deserves access to affordable coverage and high-quality care, and the Senate’s action will continue vital support that millions of hardworking American families need to purchase their own health coverage in the years to come,” said Matt Eyles, President and CEO of America’s Health Insurance Plans (AHIP), which includes big providers of Obamacare such as Centene, CVS Health and Cigna as members.
The passage of the legislation comes as health insurance companies are expanding the markets where they sell individual Obamacare coverage to serve more Americans. These health insurers are also widening their offerings with more benefits.
Take CVS Health and its Aetna health insurance unit, which last week announced plans to grow its business of selling individual coverage under the Affordable Care Act for 2023 to four new states.
Other health insurers also praised the Senate’s action, saying it maintains stability for the record number of Americans who purchase coverage under the ACA.
“The Senate’s extension of these tax credits will protect nearly 13 million Americans from cost increases at a time when the price of everything—from gas to groceries—is rising,” said Kim Keck, president and CEO of Blue Cross Blue Shield Association, which represents some of the nation’s biggest providers of Obamacare coverage.
The association includes Florida Blue, Health Care Service Corp., which sells health insurance in five states including Texas and Illinois, and Elevance Health, formerly known as Anthem, which sells Blue Cross and Blue Shield plans in 14 states.
“This move keeps real money in the pocketbooks of Americans and gives them real peace of mind,” Keck said. “We look forward to the House passing and the president signing this bill into law and will continue to work with Congress to make health care more affordable for everyone.”
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