After the American Rescue Plan: Trick or Treat?

Despite steady progress since the implementation of the Affordable Care Act (ACA) in 2014, pre-pandemic analyses estimated about 1 million New Yorkers still remained uninsured. Some were ineligible for financial help because of their immigration status, some were eligible for public programs but not enrolled in them, and some were eligible to purchase plans through New York’s marketplace but still lacked coverage. As New York seeks once again (knock on wood) to get out from under the deadly overhang of the COVID-19 virus and its variants, what further initiatives would help reach New Yorkers who still lack coverage, and will more federal help be on the way?

Help from the ARPA

Thus far, federal help has been key for states trying to cope with the health insurance effects of the economic lockdown that accompanied the pandemic. Nationally, increases in Medicaid enrollment, supported by enhanced federal matching funds, appeared to offset the loss of job-based coverage. Then, the American Rescue Plan Act (ARPA) provided states with important tools to stem insurance coverage losses. As detailed in two recent UHF issue briefs, the ARPA built on employment-related safety net programs to address coverage losses, and enhanced and extended ACA tax credits for individuals purchasing Qualified Health Plans (QHPs) through New York’s marketplace. More than 40,000 New Yorkers enrolled in new QHPs since April, and about 147,000 new and current enrollees are benefitting from the enhanced tax credits, including 18,000 who were formerly ineligible for credits. Enrollment in New York’s Essential Plan, a separate ACA program for lower-income adults now exceeds 900,000. While federal and state proposals to scrap the current system and replace it with a single-payer health care plan enjoy passionate support, and other states are experimenting with so-called “public option” laws to restrain cost growth and improve affordability, some incremental efforts to further enhance the ACA could help in the meantime.

Coverage for Immigrants

The disproportionate suffering of Black and Latinx families during the pandemic, and the life-saving contributions immigrants have made on the front lines (about a third of essential workers in New York were undocumented immigrants, and over 70% of undocumented New Yorkers worked for essential businesses) have prompted plenty of well-intentioned hand-wringing, but also some encouraging policy responses. New York’s legislature took a groundbreaking step this year when it created a $2.1 billion fund for immigrant workers ineligible for state and federal COVID relief and unemployment insurance programs. And California addressed some immigrants’ health care needs when it opened up its Medicaid program this year to low-income, undocumented residents over the age of 50; those under 26 became eligible last year. Pending federal legislation would make undocumented immigrants eligible for coverage, including financial assistance, through state and federal marketplaces. Given the bitter federal stalemate on immigration policy, enacting New York legislation to open up the Essential Plan to immigrants would help right away. Providing this coverage would recognize immigrants’ contributions to New York’s ongoing recovery from the COVID pandemic, support safety net providers, and cement a cornerstone for a more equitable health care system. 

Lowering Out-of-Pocket Costs

Through Medicaid expansion and the Essential Plan, New York has largely solved the affordability problem for people earning less than $25,000 annually. Although the ARPA sharply reduced premiums for families earning more than $25,000—over 70,000 QHP enrollees now pay less than $100 a month in premiums—the law left the ACA cost-sharing structure largely intact. Protection from deductibles and copayments is limited to lower-income enrollees, and premium subsidies are based on a “silver” plan that leaves the average consumer on the hook for about 30% of their health care costs. Nearly 40% of New York consumers are enrolled in QHPs that require individuals to front over $4,000 in deductible costs before they see any benefits for non-preventive care. U.S. Senate Democrats are backing a bill that would reduce out-of-pocket costs for higher-income enrollees and base subsidies on a higher-value “gold” plan, but states have taken steps to improve affordability too. For instance, Massachusetts adds state cost-sharing and premium subsidies on top of the federal ones, eliminating deductibles for individuals earning up to $37,000. Reducing out-of-pocket costs would relieve financial burdens on families that can lead to postponed care. Improving the value of plans might make some consumers more comfortable with the idea of buying new coverage.

Getting the Word Out

A still-fragile economy, the lingering pandemic, and ARPA enhancements that make coverage more affordable but are hard to explain all make outreach and education efforts more critical than ever. A national survey from April 2021 found that more than two-thirds of uninsured adults had heard little or nothing at all about coverage options and financial help from marketplaces. Many New Yorkers are still unaware of ARPA enhancements, and the next NYSOH open enrollment period for 2022 is set to begin on November 16, 2021

Also looming is a federal declaration of the end of the COVID public health emergency, expected sometime after the end of this year; this will trigger a restart of income recertifications for Medicaid enrollees, prohibited during the emergency. One recent analysis projected a Medicaid enrollment decline of 15 million nationally at the end of 2022, including over 1 million adults in New York—roughly the number that gained Medicaid coverage between March 2020 and August 2021. Many of these individuals will be eligible for job-based coverage once again, and others would surely qualify for the Essential Plan or financial help for QHPs. New York’s marketplace recently won a federal grant to update its IT system to accommodate the ARPA enhancements, bolster outreach, and expand language services. Now would be a great time to double down on this investment with additional federal or state resources, and to ramp up a visible, targeted, outreach effort with increased support for New York’s network of community-based enrollment counselors.

Trick or Treat?

New York’s recent coverage gains have been the product of an effective federal-state partnership. While it might be difficult now to find state resources for targeted coverage enhancements, President Biden and Congress might provide states with some additional tools as part of the “build back better” proposal. Health provisions under consideration for inclusion in the broad social infrastructure package include new Medicare dental, vision, and hearing benefits and a Medicaid-like program for states that chose not to expand eligibility. They also include provisions to make the ARPA subsidy enhancements permanent, and to create a new $10 billion annual fund for state affordability initiatives. Discussions in the House and Senate have bogged down over the size and scope of the plan, a spat over the nation’s debt ceiling, and a link to a more traditional infrastructure bill with bipartisan support. House Speaker Nancy Pelosi set a deadline of October 31, 2021, for an agreement on the package. So, by Halloween, New York policymakers may gain some new coverage treats the coming season. But without any action by Congress, consumers will face a nasty trick instead: sharp premium increases at the end of 2022 as those ARPA subsidy enhancements expire.


Oct. 29, 2021
Focus Area
Coverage and Access
Health Insurance Project