The United States’ longest federal government shutdown, because Congress and the President have seemingly been unable to find common ground, may be ending soon. A major sticking point has been federal government health insurance subsidies: in time-honored fashion, the U.S. Senate “kicked the can down the road” and agreed to “discuss” the Patient Protection and Affordable Care Act (ACA) at a later date.
Even if the Senate should stick to its word and consider health subsidies, there is no assurance that the House of Representatives or the President will agree.
What Is at Stake?
In 2024, according to the Centers for Medicare and Medicaid Services (CMS), more than 21 million people enrolled in ACA health plans, of which over 90% of those enrolled receive a subsidy, or nearly 20 million people.
Subsidized plans must cover 10 essential health benefits, namely: Ambulatory patient services, emergency services, hospitalization, maternity ad newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services.
Any new agreement will have immediate and future impact on individuals and health facilities. Insurance costs for individuals and households are determined by private insurers, and are expected to increase dramatically and simply become unaffordable for many without subsidies. If the encahnced tax credits expire, the Center on Budget and Policy Priorities estimates that four milion people will become uninsiured in the coming years.
Any discussion of public health support in the United States must take into account it is a combination of the Federal Government and the fifty States, each of the latter having its own rules and regulations.
Thus, the public response to healthcare is very complex and certainly could benefit from thoughtful, system-wide reform — but not by focusing on limiting support for those most at risk.
ACA subsidies are aimed at individuals and families with incomes between 100% to 400% of the Federal Poverty Level (FPL). Such assistance is especially crucial for low- to middle-income families, to help them afford any health insurance. Hospitals are also dependent on the ACA, and if there are many more uninsured patients, it would lead to higher uncompensated care costs, with rural and safety-net facilities especially vulnerable.
Impact of ACA at State Levels
While ACA affects every State, it hurts some more than others. The Urban Institute identified those States expected to see subsidized enrollment fall by more than half. These include Georgia, Louisiana, Mississippi, Oregon, South Carolina, Tennessee, Texas and West Virginia.
These states already have higher-than-average uninsured rates and lower median incomes, making them especially vulnerable to subsidy loss.
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If Subsidies Are Not Reinstated
The likely effect will be a significant decline in public health prevention, preparedness, and response. Fewer people will be seeking or getting care of chronic conditions, and there will be fewer health facilities to serve them.
The health system’s capacity to early identify infectious disease outbreaks, ones which might lead to epidemics or even pandemics, is especially at risk and more so in rural areas where there is a greater interface between humans, animals and the ecosystem.
Further, reliance on having multiple private insurance choices may decline, inasmuch as some will exit the ACA marketplaces due to shrinking enrollment and rising risk. Those remaining may become unaffordable or offer limited coverage.
The Key Message
The potential disruption to discontinue health assistance relied upon by the more vulnerable affects millions in the United States, reversing progress made in healthcare access and affordability.
The American legislature and Executive Branch must urgently resolve, appropriate, and disburse ACA funds. For intended recipients, it is not something they can wait for another procedural discussion; for many, it is life or death.
The current U.S. impasse serves as a flashing light for other countries to provide the funds to maintain or improve legislative and administrative actions to protect healthcare coverage for vulnerable populations. Pay now — or pay much more later!
