Now that the Inflation Reduction Act (IRA) has surmounted the key hurdle of passing the Senate — and is expected to soon pass the House of Representatives as well — the Affordable Care Act exchange market is set for another late-season policy shift that could alter next year’s premium rates. However, experts tell AIS Health that the effect on carriers’ overall premium calculations won’t be as significant as the impact on consumers’ out-of-pocket insurance expenses.
The IRA extends for three years the ACA subsidy expansion that has been in place since midway through the 2021 plan year thanks to the American Rescue Plan Act (ARPA), a coronavirus relief package. ARPA’s main impacts were twofold: First, it eliminated the subsidy cliff for higher-income individuals by extending eligibility for advance premium tax credits to include people who have incomes over 400% of the federal poverty level (about $54,000 for a single person or $111,000 for a family of four in 2022). The law also increased subsidy levels for those already eligible, setting benchmark silver premium contributions at $0 for all enrollees with incomes below 150% of FPL (about $20,000 for one person or $42,000 for a family of four).