The White House recently released a series of state-specific fact sheets touting, among other things, how many people will keep their exchange coverage due to the extension of subsidies by the newly passed Inflation Reduction Act (IRA). There’s just one problem. The lofty coverage estimates ignore significant state-level variations in exchange enrollment — and are therefore wildly inaccurate.
The IRA extended the temporary subsidies enacted as part of the 2021 American Rescue Plan Act until 2025. Originally, they were set to expire at the end of this year. Now, for three additional years, exchange enrollees with incomes below 400% poverty will continue to enjoy more generous subsidies than Obamacare provided. Those making more — whom the Rescue Plan made eligible for federal subsidies for the first time — will continue paying no more than 8.5% of their income for coverage.
The Biden administration also just earmarked nearly $100 million for navigators to help people sign up for coverage through the exchanges. The administration estimated that letting those subsidies sunset on schedule would have resulted in 3 million people losing exchange coverage. Roughly 3.1 million people enrolled in Obamacare after the extra subsidies were passed into law. They seem to have assumed that those 3.1 million people signed up for coverage because of the subsidies. Without them, they’d drop their policies.
But the White House fact sheets assume those coverage gains were spread evenly across all states. In fact, state-specific factors were responsible for massive variations in enrollment, according to an analysis by the Center of the American Experiment, a Minnesota-based think tank.
Since Medicaid beneficiaries weren’t eligible for the more generous Obamacare subsidies, enrollment gains were lower in states that have expanded Medicaid. In other states with higher-than-average exchange premiums, the new subsidies were more enticing to a greater number of residents, resulting in higher coverage gains.
Some states, like New York, have their own health programs for low-income individuals, which may help explain stagnant or even decreasing Obamacare enrollment post-ARPA. The fact sheets fail to account for these variations. According to the Center of the American Experiment analysis, the Biden administration simply divvied up the roughly 3 million people who “gained coverage” from the subsidy extension based on each state’s share of national exchange enrollment.
The result is a series of misleading enrollment numbers from an administration desperate to sell its wasteful healthcare policies to taxpayers.