The report was written by
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* Under the American Rescue Plan Act of 2021 (ARP), people who receive or were approved to receive unemployment compensation (UC) for any week beginning in 2021 are eligible for enhanced Marketplace subsidies to obtain health insurance and to pay for care. The enhanced subsidies are accessible on HealthCare.gov as of
* Marketplace advanced premium tax credits (APTCs) are newly available for taxpayers receiving UC with household income less than 100 percent of the Federal Poverty Level (FPL), while those with higher household incomes now generally qualify for zero-premium benchmarks plans, since the ARP treats taxpayers receiving UC benefits as if their household income was at least 100 percent and no more than 133 percent FPL./i
* Those newly eligible for premium tax credit subsidies under the ARP (household income above 400% FPL) are likely to see some of the greatest decreases in post-APTC premiums if they received UC in 2021. This Issue Brief presents several case studies, showing premium savings as a result of the ARP, in some cases of more than
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American Rescue Plan (ARP) Unemployment Compensation Provision for Health Coverage The COVID-19 public health emergency has exacerbated the health care needs of uninsured, unemployed workers. A total of 6 percent of all adults (15.3 million individuals) reported in a July-
Other studies indicate lower estimates of loss of health coverage, with many employers continuing health coverage for their laid off employees;/3,4 however, uncertainty regarding stability of coverage remains.
The ARP, enacted on
These rules also allow UC recipients with household incomes below 100% FPL who are not eligible for Medicaid to be eligible for Marketplace subsidies. These provisions are temporary and only apply to UC recipients for 2021 and are being implemented on HealthCare.gov beginning
The purpose of this Issue Brief is to examine the UC premium tax credit (APTC) and cost-sharing reduction (CSR) provisions under the ARP, describe the populations likely to benefit from these new temporary provisions, and to provide illustrative examples to highlight the possible household impacts of these provisions.
Our analysis uses
We also review external studies on the uninsured and UC recipients during the COVID-19 public health emergency.
Eligible Population of UC Recipients
Unemployment compensation programs are administered by the states, funded by state and federal taxes on employers; three states provide for employee contributions. During prior economic downturns, the federal government fully funded additional weeks of emergency benefits for workers who exhausted their regular UC.
The Emergency Unemployment Compensation Act of 2008 and subsequent legislation provided up to 34 weeks of additional UC (up to 63 weeks in states with unemployment rates of 8.5 percent or higher), paid by 100 percent federal funding.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act (
The Consolidated Appropriations Act, 2021 (
Figure 1 presents a map of the share of each state's labor force that was receiving UC as of
Since the ARP features are tied to UC receipt, that is the more relevant measure for understanding the ARP's impact on health insurance, rather than the unemployment rate, which includes some individuals who are no longer receiving UC or never received UC.
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[See link at end of text for Figure 1: Total Unemployment Compensation Recipients as a Percentage of Labor Force by State, as of
Note: PEUC and PUA claims were missing for
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Table 1 shows state level unemployment rates and UC recipient rates along with the most recent data available on health uninsurance rates from the 2019
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[See link at end of text for Table 1: Rates of Unemployment, Unemployment Compensation Recipients, and Uninsured by State]
*PEUC and PUA were missing for
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UC Recipients without
Precise information on uninsured rates among those receiving UC is not available in administrative data.
However, survey data offer some insights. An analysis of the
Two-thirds of these uninsured workers receiving UC live in just 10 states/9 :
Impact of ARP UC Provisions on Marketplace Premiums
Generally, households with incomes less than 100 percent FPL/v in states that have not expanded Medicaid are not eligible for APTCs and many are also not eligible for Medicaid; this situation is known as the "Medicaid coverage gap." A recent ASPE report estimated that there are 2.3 million uninsured non-elderly adults in the Medicaid coverage gap,/10 and the new ARP UC provisions will make APTCs available to many of them. UC recipients who are taxpayers and their tax households who meet the other eligibility criteria for APTCs/vi are now eligible for enhanced APTCs.
Because the ARP UC provision treats the households of UC recipients as if they had household incomes of at least 100 percent and no more than 133 percent FPL, they are generally eligible for zero-premium benchmark silver plans. Households in which any individual is a UC recipient can also be eligible for cost-sharing reductions. For comparison, before the ARP, households with income of 133 percent FPL paid up to 2.07 percent of their household income towards the premium of the second lowest cost silver (SLCS) plan.
A small number of states do not have zero-premium plans. This most commonly occurs if all plans in the state cover services that are not Affordable Care Act (ACA) defined essential health benefits (EHBs), which means premiums in that state cannot be reduced by APTCs to zero dollars./vii However, due to the comprehensiveness of ACA EHBs, non-EHB portions of premiums are typically relatively small. These details are discussed at more length in ASPE's previous analysis of zero-premium plans under the ARP./11
APTCs can be applied to any metal tier plans (Bronze, Silver, Gold, or Platinum) enrolled in through the Marketplace, with consumers paying the difference in premium between the benchmark plan (second-lowest cost silver) and their chosen plan, if its premium is higher. People with household incomes of 133 percent FPL (or treated as such, as in the case of UC recipients) who are otherwise eligible can enroll in plans with CSRs that yield an actuarial valuev/iii (AV) of 94%, meaning that the plans cover on average 94% of total costs of in-network essential health benefits (EHB) covered by the health plan, meaning consumers can expect to pay on average the other 6% of those costs. This means that under the ARP, some UC recipients will be eligible not just for substantial premium savings but also for far more generous coverage, with lower deductibles and copays.
The enhanced APTCs and CSRs for UC recipients will be implemented at HealthCare.gov starting on
UC recipients residing in states with State-based Marketplaces (SBMs) are also eligible for enhanced APTCs.
At least six SBMs (
The ARP also extended options for coverage through Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage, most commonly utilized by those who have lost benefits from a job. Under the ARP, 100 percent of COBRA premiums for eligible individuals are paid for by the federal government through
Estimated Take-up of the ARP Provisions for UC Recipients
According to a 2018 Commonwealth survey, two thirds of uninsured adults did not try to enroll in health insurance on the Marketplace./13
When asked why, 36 percent said they did not think it would be affordable, 15 percent said they did not think they needed it, 8 percent said they did not think they would be eligible for insurance, and 7 percent said they were not aware of the Marketplace. Those receiving UC in 2021 can apply for health plans with APTCs and CSRs during the COVID-19 Special Enrollment Period through
Case Studies: Potential Household Impacts
We selected several hypothetical case scenarios to highlight the impact the ARP UC provision could have on individuals and families. The individuals, families, and couples differ by age, household income, state (Medicaid expansion and non-Medicaid expansion), and geography. Table 2 shows these scenarios and premiums (net of APTCs) before and after the ARP UC provisions.
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[See link at end of text for Table 2: Vignettes Illustrating the Impact of the ARP UC Provision Could Have on Premiums and AV]
Note: Plan Year 2020 APTC determination is based on 2020 FPL guidelines
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Individuals who received UC in 2021 with household income outside of the CSR eligibility range (generally <100% FPL and >250% FPL) will see the greatest increase in the AV of their benchmark plan, going from 70% to 94%. Meanwhile, those not currently eligible for any APTCs (primarily those below 100 percent of FPL in non-Medicaid expansion states) would see very large reductions in premiums.
These changes represent substantial potential savings in terms of premiums and out-of-pocket costs. For example, a single 27-year old adult in
Those newly eligible for premium tax credit subsidies under the ARP (household income above 400% FPL) may see some of the greatest decreases in post-APTC premium if they received UC in 2021. For example, a qualifying 40-year old couple in
Eligible UC recipients with annual household income above 200% and up to 250% FPL may also benefit substantially, with silver plan AV on average increasing from 73% to 94% and monthly benchmark premiums decreasing to zero or near zero. For example, a family of 4 in
Those with annual household income about 150% FPL and up to 200% FPL may also see some reduction in benchmark premiums and increase in silver plan AV (from 87% to 94%)--for example, a family of 3, with parents age 45 and a dependent age 19, annual income of 175% FPL, living in
The ARP UC provisions address the impact of the COVID-19 pandemic on job loss, as well as the need for affordable health insurance coverage. They provide enhanced Marketplace subsidies to individuals receiving unemployment compensation in 2021. These significant changes, which are available starting
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1 Dorn, S and Dorn,
2 Data from
3 McDermott, D, Cos, C, Rudowitz, R, and Garfield, R. How Has the Pandemic Affected Health Coverage in the
4 Fronstin, P. and
6 Health Insurance Exchange Public Use Files (Exchange PUFs).
7 Unemployment Insurance Weekly Claims.
8 Dorn, S and Dorn,
9 Data from
10 Branham DK, Peters C, and Sommers BD. Estimates of Uninsured Adults Newly Eligible for Medicaid If Remaining NonExpansion States Expand (Data Point No. HP-2021-12).
11 Branham DK,
12 Reconciliation Recommendations of the
13 Gunja, M. Z. and
14 Issue Brief No. HP-2021-13. Health Coverage Under the Affordable Care Act: Enrollment Trends and State Estimates.