Uninsured Ranks Would Fall by 4.2M with Permanent Subsidies

ACA marketplace enrollment would increase 60% in 2022 by extending ARPA's temporary subsidies.

The numbers of uninsured people in the United States would fall by 4.2 million if the temporary health insurance subsidies in the American Rescue Plan Act were made permanent, according to a new study by the Urban Institute.

The study, commissioned by the Robert Wood Johnson Foundation, estimates that subsidized enrollment would increase by 5.1 million, and that 317,000 people with non-Affordable Care Act-compliant coverage would switch to a more comprehensive ACA-compliant plan if they were to become newly eligible.

When those estimates are combined, the report said, it could lead to a 60% increase in marketplace enrollment in 2022 if the ARPA were to become permanent.

"Making the enhanced ACA subsidies in the American Rescue Plan Act permanent would have a dramatic effect on both coverage and affordability," said Katherine Hempstead, a senior policy adviser at RWJF.

"Enhancing premium tax credits could positively impact the marketplace, leading to greater insurer participation and resulting in lower premiums. That’s good news for consumers and insurers," she said.

Under the ARPA, people with incomes over 400% of poverty are eligible for subsidies to buy health insurance on the ACA marketplace. The law also increases financial assistance for lower-income people who were eligible for ACA coverage. Both provisions took effect retroactively on Jan. 1, 2021 and will expire in two years.

An earlier report by the Urban Institute in July 2020 estimated that 3.5 million people would lose their employer-sponsored health insurance.