Analysts: Inflation Reduction Act Will Have Mixed Impact on Health Insurers

With the Inflation Reduction Act (IRA) now signed into law by President Joe Biden, analysts are predicting that some — but not all — of its health care provisions will be a boon for the managed care industry.

In a new report, insurance industry-focused credit rating firm A.M. Best noted that insurers estimated 2 million to 3 million people would drop their Affordable Care Act exchange policies if enhanced subsidies — which were ushered in as part of coronavirus relief legislation — expired in 2023. The IRA prevented that outcome, however, by extending subsidies for three years. The increased financial aid for enrollees both eliminated the subsidy cliff for higher earning individuals and provided access to zero-premium plans for people on the lower end of the income scale, helping drive enrollment to a record high in 2022.

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Leslie Small

Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.

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