Here's how Biden's rescue plan expands affordable health care

President-elect Joe Biden unveiled his $1.9-trillion stimulus bill on Thursday night that includes several actions addressing health care access and affordability in the U.S. as the country struggles to contain the coronavirus pandemic.

The proposal called the ‘American Rescue Plan’ is a multi-pronged strategy, responding not just to the pandemic, which has taken over 389,000 American lives, but also to the economic havoc it has wrought with over 22 million jobs lost.

“Roughly two to three million people lost employer sponsored health insurance between March and September, and even families who have maintained coverage may struggle to pay premiums and afford care,” according to the fact sheet on Biden’s proposal. “These policies would reduce premiums for more than 10 million people and reduce the ranks of the uninsured by millions more.”

Here’s what the plan would do.

First, Biden is calling on Congress to subsidize COBRA through the end of September. COBRA is a health care program in which an individual who lost their job continues the same health care coverage they had under their employer-based health insurance. COBRA, though, has higher premium payments since the employer no longer contributes.

But through Biden’s plan, the federal government would cover 100% of the premium cost, meaning the worker who lost their job would not have to pay their portion or the portion their employer previously covered.

Additionally, Biden’s plan endeavors to expand and increase the value of the Premium Tax Credit, a refundable credit that helps Americans cover the premiums for health insurance they got through the Health Insurance Marketplace. Biden aims to lower or eliminate premiums and make sure those who are enrolled don’t “pay more than 8.5% of their income for coverage.”

Also included in his plan is a request for Congress to appropriate $4 billion to the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA) to expand access to behavioral health services.

Biden noted that the pandemic has made access to these services more vital than ever before. And new data from the Centers for Disease Control and Prevention (CDC) supports that statement — it revealed that over 81,000 drug overdose deaths occurred in the U.S. in the 12-month period ending in May 2020. That’s the highest level ever recorded by the CDC.

‘There are still tens of millions of people going without health coverage’

At least some aspects of the plan will likely have bipartisan support, according to Bill Hoagland, senior vice president at the Bipartisan Policy Center, including the subsidizing of COBRA and expansion of mental health services access.

“It will be looked at in the context of the overall package of $1.9 trillion,” Hoagland told Yahoo Money. “A number of other non-health care provisions — $1,400 benefit, child tax credit, earned income tax credit, etc. — will provide immediate assistance to families and individuals and along with COVID provisions, public health core expansion, to help address current needs.”

“Longer-term changes to the ACA will need to be addressed but should wait for the ‘recovery’ phase,” he added.

Although Hoagland said he is “not sure how effective it will be,” he does think the COBRA extension “will be helpful for those who have been permanently laid off.”

Between February and May 2020, an estimated 5.3 million people lost their employer-sponsored health coverage. With job losses continuing since then, that number could be even higher.

“Our analysis of data through September 2020 shows, largely because of the ACA, Medicaid enrollment has picked up by at least as much as employer coverage has dropped,” said Cynthia Cox, vice president at the Kaiser Family Foundation. “The ACA exchanges might also be picking up some of the slack … Our analysis suggests there are still tens of millions of people going without health coverage during the worst pandemic to hit our country in 100 years.”

Because of that, she continued, “that’s why any expansion of subsidized coverage, whether through COBRA subsidies, expanded exchange subsidies, easier Medicaid enrollment, or states newly expanding Medicaid will help get people covered at a time when it’s so essential. COBRA subsidies would be particularly helpful in states that haven’t expanded Medicaid.”

‘A major step in the right direction’

As for expanding the premium tax credit, improving it is something that Biden has long spoken of as part of his health care plan.

Under his general health care plan (not COVID-specific), he would provide federal subsidies to everyone, regardless of income, and ensure that those enrolled in Obamacare (also known as the Affordable Care Act, or ACA) coverage would pay no more than 8.5% of their income. Health insurance is deemed “unaffordable” by the ACA if the annual premiums for the lowest-priced plan costs more than 8.05% of your modified adjusted gross income in 2018.

Hoagland isn’t certain this aspect of Biden’s proposal will receive bipartisan support — at least for now.

“I do not believe this is ready for the current rescue package and will be part of a larger, later discussion of reforms to the ACA,” he said. “I don’t believe this will have bipartisan support at this time, but maybe later when considered along with other reforms.”

Despite that, Hoagland is encouraged by the health care components in Biden’s stimulus plan.

“I believe this is a major step in the right direction,” he said.

Adriana is a reporter and editor covering politics and health care policy for Yahoo Finance. Follow her on Twitter @adrianambells.

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