OPINION: Congress must act to keep healthcare costs down
The federal American Rescue Plan Act has eased some of the cost burden for Oregonians who buy their own health insurance.
The law gave people more financial help to pay premiums, but now those subsidies are at risk. If Congress does not act, the subsidies will shrink at the end of next year and vanish entirely for some households.
As an advocate and analyst of health coverage for more than 15 years, I see this as a crucial opportunity for lawmakers to safeguard access to health insurance if they act now.
With influential committee roles, Sen. Ron Wyden and Rep. Kurt Schrader can protect the subsidies by working to include them in the federal budget reconciliation bill that's under negotiation.
Oregonians scraping by financially, but not eligible for the Oregon Health Plan, will pay more if the subsidies are not preserved. People working up to more comfortable incomes will lose all financial help, facing the stark challenge of paying their premiums at the ever-increasing full sticker price. That challenge gets steeper for older people, as unsubsidized premiums rise with age.
The subsidies at risk are concrete savings for thousands of Oregonians.
Picture someone making $25,000 a year, with no dependents. Making rent is probably a challenge, especially if they're also paying on a student loan or a used-car note.
Under the ARPA subsidies they qualify to get a mid-level health plan for $45 a month, or about 2% of their income. If those subsidies expire at the end of 2022, they will have to pay about $135 for that plan.
People at higher incomes pay more for coverage under any subsidy system, but if the ARPA subsidies expire, they get locked out of help as soon as their income rises above about $52,000 for a one-person household.
Under ARPA, if a person making $51,000 a year buys their own health insurance, they pay about $361 a month for a mid-level plan, or 8.5% of their income. That's no drop in the bucket for most people, but the cost rises even higher if they manage to pull their income up to $53,000, and the ARPA subsidies are not extended. Subsidies will disappear and they will pay the insurance company's full price, $567 this year for someone age 50 (lower for younger people; higher for older people), and higher every year.
When we talk about people who need healthcare subsidies, we're talking about low-wage workers and early entrepreneurs; recent graduates and near-retirees; adult children leaving the nest and longtime professionals pausing to care for elderly parents. They're digging deep to cover their health costs under any subsidy program and feel the pinch in their household budgets directly when costs rise.
Our congressional delegation knows how hard the pandemic has been on the health and finances of Oregonians. People doing their best to maintain health insurance deserve the stability of permanent, expanded subsidies to keep their coverage within reach.
The best chance for delivering that help will be through federal budget reconciliation, and I hope Sen. Wyden and Rep. Schrader will seize that opportunity as negotiations continue.
Elizabeth Cronen is a former communications and legislative manager for the Oregon Health Insurance Marketplace. She now leads Vellamo Consulting, a policy communications firm. She lives in Beaverton.
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