The US Senate’s passage of the Inflation Reduction Act on Sunday extends tax credits for millions of Americans who buy individual coverage under the Affordable Care Act, known as Obamacare.
These subsidies, which have been temporary since the passage of the American Rescue Plan Act, which increased financial assistance to those already eligible to buy health insurance under the ACA and also extended these subsidies to even more middle-class Americans class that was “previously priced out of coverage,” an analysis by the Kaiser Family Foundation shows.
This bill would “save millions of people an average of $800 a year in health insurance premiums,” said Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services.
The three-year subsidy extension, which is expected to pass the Democratic-controlled U.S. House of Representatives later this week, is not only good news for the record number of Americans buying coverage under the ACA, but also for health insurers who sell it. The tax credits were set to expire this year, affecting benefit plans through 2023, health insurers said.
“Every American deserves access to affordable coverage and high-quality care, and the Senate’s action will continue the vital support that millions of hardworking American families need to purchase their own health coverage in the years to come,” said Matt Eyles, President and CEO of American Health Insurance Plans (AHIP), which includes major Obamacare providers such as Centene, CVS Health and Cigna as members.
The legislation’s passage comes as health insurance companies expand the markets where they sell individual Obamacare coverage to serve more Americans. These health insurances are also expanding their offerings with more benefits.
Take CVS Health, which last week announced plans to expand its business selling individual coverage under the 2023 Affordable Care Act to four new states.
Other health insurers also praised the Senate’s action, saying it maintains stability for the record number of Americans buying coverage under the ACA.
“The Senate’s extension of these tax cuts will protect nearly 13 million Americans from increases costs at a time when the price of everything — from gas to groceries — is going up,” said Kim Keck, president and CEO of the Blue Cross Blue Shield Association, which represents some of the nation’s largest Obamacare providers.
The association includes Florida Blue, Health Care Service Corp., which sells health insurance in five states, including Texas and Illinois, and Elevance Health, formerly known as Anthem, which sells Blue Cross and Blue Shield plans in 14 states.
“This move keeps real money in Americans’ pockets and gives them real peace of mind,” Keck said. “We look forward to the House passing and the president signing this bill into law, and we will continue to work with Congress to make health care more affordable for all.”