The calls from doubting policyholders have been coming into HealthSource RI recently as they express concern that there might have been a mistake on their invoice.
That’s because of the American Rescue Plan Act – the $1.9 trillion COVID-19 stimulus package, which includes about $30 million in tax credits to provide financial help to people who purchase health insurance through Rhode Island’s marketplace. Now the agency’s customer service team reports that people are caught off guard about the low cost of their policies.
“People are calling up in disbelief, and they want to validate that their invoice is correct,” said Lindsay Lang, HealthSource RI director. “They can’t believe it.”
Aid from ARPA has reduced premiums across the board at the health insurance exchange and increased the range of people eligible for coverage. In some cases, monthly premiums can cost less than a dollar, Lang said.
The cost savings are due to $30 million in subsidies such as the “advanced premium tax credit,” which provides the needy assistance by lowering the cost of monthly premiums, Lang said. People who earn more than 400% of the federal poverty level are now eligible for coverage. For people at poverty level, the cost of insurance is nominal, with single individuals earning less than $18,000 annually seeing their premiums reduced to less than $1 per month.
“It sounds too good to be true – like one of those gimmicky ads you would see on a billboard – but it’s actually true,” Lang said. “If you have a dollar in your pocket, you could get coverage for a month.”
How long will these subsidies last?
Robert B. Hackey, a professor of health policy at Providence College, said that while the ARPA subsidies may be unsustainable due to their temporary, one-time nature, he sees the subsidies that are a part of the Affordable Care Act remaining intact, and believes there will be no end to subsidized health coverage in the U.S., as the public values health care.
“In the ’60s and ’70s everyone thought the cost of health care would be unsustainable, but yet here we are,” said Hackey, who co-authored a book titled “Today’s Health Care Issues: Democrats and Republicans.”
Hackey said one of the drawbacks to the current subsidized system is cost sharing, as unhealthy participants must pay out-of-pocket costs beyond their premiums, which can make health care prohibitive in some cases.
As of now, Hackey said, ARPA has played a valuable role in the state’s health care system.
“It’s a pretty remarkable thing for the people who thought that they couldn’t afford coverage,” he said. “It also relieves the burden of the hospitals because they would be treating those folks as uncompensated care.”
Implementation of ARPA-subsidized tax credits meant an increase of 13% in HealthSource enrollees for 2021 over the prior year. For now, the enhanced tax credits have been extended into 2022 under ARPA, which people can apply for during the open enrollment period until Jan. 31.
Lang said that with the ARPA subsidies, there’s an increase in assistance of about $52 a person per month on average. The average premium price prior to ARPA was about $123 a month after applying tax credits. Now, the premium is about $68 a month on average.
Under ARPA, a 60-year-old earning $60,000 annually would see their premium reduced from $742 to $425 a month. The premium for a 30-year-old earning $30,000 a year would be decreased from $193 to $83 a month.
A family of four that earns a collective $70,000 annually will be eligible for their coverage at $274 a month. That is a cost reduction of up to $800 less than it was prior to ARPA.
“So, it’s real money,” Lang said.
Robin Dionne, HealthSource RI spokesperson, said 19% of those enrolled have premiums under $1 a month, compared with 2.5% prior to the ARPA subsidies. And 43% have premiums under $10 per month, compared with 10% prior to ARPA.
“One provision that ended is additional financial assistance to people who received unemployment insurance benefits during 2021,” Dionne said. “At this time, that federal benefit is scheduled to end on Dec. 31.”
Lang said the unemployment assistance could return in 2022 under the Biden administration’s Build Back Better Plan. Per the benefit, the unemployed could receive the maximum tax credit and a zero-cost deductible policy.
HealthSource RI also has a program for employers that provides about 1,000 small businesses with commercial insurance policies.
Lang said the HealthSource goal is to boost the percentage of insured Rhode Island residents from 96% to 100%, but she noted that the uninsured population is difficult to reach because they might not be receiving information about HealthSource RI or believe the coverage does not apply to them.
The uninsured are disproportionately represented by young people who tend to be male and from the Latino community, she said, noting that some people are falling into the ranks of the uninsured for the first time due to employment status.
“We’re built for job loss, or income loss,” Lang said. “We are here for you, and you can get really low-cost coverage through us.”
Cassius Shuman is a PBN staff writer. Email him at Shuman@PBN.com.
