Latino: The truth about ACA subsidies after the "One Big Beautiful Bill"

Below is a political opinion column by Russ Latino:

Nearly a third of enrollees on the ACA exchange continue to pay $0 in health insurance premiums. Caution in accepting propaganda masquerading as fact.

If you've followed the headlines, you'd think Congress recently pulled the rug out from under low-income Americans' access to health insurance.

Only, no.

The debate over the Affordable Care Act took a predictable turn after the "One Big Beautiful Bill" passed. Critics quickly claimed the legislation gutted subsidies and made coverage unaffordable for the working poor.

The facts tell a different story. The OBBB did not end the subsidies contained in the Affordable Care Act. They persist. Enhanced subsidies created during COVID, and sold by the Biden administration as "temporary premium reduction," expired as originally designed. Lower income workers did not see premiums explode as a result. Nearly a third still pay no premiums at all and the median monthly premium is now just $42 dollars.

The OBBB Did Not End ACA Subsidies

When the Affordable Care Act passed in 2010, it created a taxpayer-subsidized health insurance exchange. The goal was to provide private coverage to people who didn't qualify for Medicaid but couldn't access or afford private insurance on their own.

To make that work, the law capped how much enrollees would pay in premiums as a percentage of their income. It created "tax credits" paid by taxpayers to subsidize the premium cost.

For someone earning between 100 and 150 percent of the federal poverty level, that meant contributing roughly 2 to 4 percent of their income. Taxpayers covered the rest.

Then COVID hit.

In response, Congress temporarily expanded ACA subsidies through the American Rescue Plan Act. Lawmakers lowered required contributions across all income levels. The enhanced subsidies created under ARPA pushed premiums to $0 for households under 150 percent of the poverty level. Congress also expanded, for the first time, ACA subsidies to people earning above 400 percent of poverty (roughly $132,000 for a family of four).

Importantly, those changes were never pitched as permanent.

At the time, the Biden White House explicitly described them as "temporary premium reductions. Nancy Pelosi and Chuck Schumer made clear statements that the changes would only persist for the duration of the health emergency. The structure of the law, itself, assumed they would expire.

The "One Big Beautiful Bill" did not eliminate subsidies. It allowed the temporary expansion to lapse. It returned the system to its original design.

The Working Poor Are Not Being Squeezed

Much of the recent coverage focuses on rising "average premiums." The math behind those claims isn't wrong, per se, but it is misleading.

Here's why.

Moving from an average of $37 a month to $50 a month for the lowest tier plan available on the ACA is small numerically — $13 or $156 annually. Expressed as a percentage, it's a "huge" 35 percent increase. But both numbers are still very small. And taxpayers are still covering nearly $700 per month to pay the rest of the actual premium.

After the rollback of temporary enhanced subsidies, the system remains extraordinarily generous.

Even more, the averages don't tell you who is actually affected.

The bulk of the increase is concentrated among higher-income enrollees — those earning 300 percent of the poverty level or more (about $99,000 for a family of four) and those above 400 percent, who no longer qualify for subsidies at all. These are people who probably should have never been subsidized to begin.

Those changes move averages in big ways. They do not reflect the experience of most lower-income enrollees, who compromise the bulk of all enrollees.

To understand what's happening to the working poor, you need to look at the median.

Today, the median premium paid by ACA enrollees is just $42 per month. Taxpayers cover more than 94 percent of the total premium cost at that level.

That is the typical enrollee, not the outlier driving average increases.

The income distribution makes this even clearer.

Roughly two-thirds of enrollees nationwide earn under 200 percent of the federal poverty level (about $64,300 or less for a family of four). In Mississippi, the numbers skew even more dramatically. About 75 percent of enrollees fall below the 200 percent threshold, with roughly 55 percent between 100 and 150 percent of poverty.

For these households, premiums remain minimal. In fact, 29 percent of all enrollees still pay $0 per month.

That outcome is not just the result of taxpayer-funded subsidies. It also reflects how insurers compete on the exchange. Carriers often price plans so that federal subsidies fully cover premiums. They effectively "eat" the premium portion the beneficiary is supposed to pay in order to attract enrollees with $0 premiums.

In short, the working poor remain heavily subsidized after the OBBB, often paying nothing at all.

Enrollment Surged During COVID, Moderate Declines Since OBBB

If the system were collapsing, you would expect enrollment to fall sharply.

That's not what the data show.

Before COVID, about 11.4 million people were enrolled in ACA exchange plans, at a cost of roughly $55 billion annually.

After the temporary subsidy enhancement passed, enrollment more than doubled to over 24 million. Federal spending climbed to nearly $120 billion per year.

Mississippi saw an even more dramatic shift. Enrollment grew from 86,000 to roughly 330,000.

That surge did not disappear when the enhanced subsidies expired last year.

Instead, enrollment has declined only modestly. Nationally, enrollment is down by about 1 million people. Mississippi has seen a drop of roughly 23,000 enrollees.

Even after that decline, participation remains many multiples higher than pre-COVID levels (more than triple in Mississippi).

That pattern tells you where the change is happening.

The people most likely to leave are those who benefited from the temporary expansion at higher income levels. They face higher premiums now or no longer qualify for subsidies at all. Many have other coverage options.

Again, lower-income enrollees make up the overwhelming bulk of participants. If their income band was being significantly affected, the drop in enrollment would be much more precipitous than the single digit fall experienced.

A Reset to Above Normal Couched as Catastrophe

It's good politics to suggest one political party is killing or starving poor people. In reality, far more people are on the government dole, at a far higher price tag, than before COVID hit.

The enhanced subsidies expanded the ACA beyond its original design. They increased spending. They broadened eligibility. And they drove enrollment to historic highs.

But they were always meant to be temporary.

Now they are gone.

What remains is the system Congress originally created. The lower-income core of the exchange remains intact because the subsidies to that core remain ridiculously generous.

Most enrollees still pay very little. Many still pay nothing. Taxpayers still cover the vast majority of costs for the typical participant.

The data make the conclusion unavoidable. The sky falleth not.

-- Article credit to Russ Latino for the Magnolia Tribune