A Smaller Social Spending Plan Can Still Provide a Consequential Health Care Fix

For all the focus on tradeoffs, compromises and downsized ambitions as congressional Democrats and the Biden White House near the endgame in negotiations over the administration’s social spending plan, there’s still a remarkable opportunity to continue changing health care in ways that address the painfully persistent and interconnected problems of cost and access to care. 

The very best health care option under discussion is notably still on the table: Permanently bolster tax credits for those who are eligible to purchase coverage through the Affordable Care Act marketplaces, and use a further expansion of this assistance as a way to help cover more than 2 million people living below the poverty level in states that have refused to expand Medicaid. 

We’ve already seen positive results from the temporary expansion of tax credits enacted as part of the American Rescue Plan Act for COVID relief. Amid massive layoffs and furloughs that characterized the early months of the pandemic, the rate of uninsured, which usually jumps as people lose their employer-based health coverage, remained largely unchanged. This is partly due to increased enrollment in government programs such as Medicaid, and partly due to the enhanced assistance to purchase ACA coverage, coupled with a special enrollment period meant to support people through the turmoil of the epidemic.  

According to an analysis by the nonpartisan Commonwealth Fund, making the enhanced tax credits permanent, and using a similar expansion to allow people with incomes below 100 percent of the federal poverty level (currently $26,500 for a family of four) would reduce the number of people without health insurance by about 7 million people in 2022. Other analyses, including one by the private consulting firm Oliver Wyman, reach a similar conclusion. 

Meanwhile premiums for ACA coverage would fall by 18 percent on average, the Commonwealth Fund says. This is a byproduct of younger, generally healthier people entering the insurance market.

Compare this result with the proposed expansion of Medicare to cover dental, vision and hearing services—currently a contentious subject in the negotiations. The added Medicare benefits would not reduce the number of uninsured, would not extend the safety net under families living in poverty and would do nothing to reduce overall healthcare costs.  

Looking only at dental care as an example, the Urban Institute found that less than half of Medicare beneficiaries have no dental coverage at all. Among those who did, in 2020, the average out-of-pocket cost for dental services was $357.  While this sum undoubtedly is burdensome for many elderly patients, it hardly represents the same level of crisis that is faced every day by low-income, uninsured families who have limited or no access even to the most basic care.

The Affordable Care Act has proved to be an effective and enduring approach to expanding access to care, lowering costs for individuals who purchase coverage and providing a lifeline for those who need it most. Democratic lawmakers, many of whom voted to establish the ACA, should double down on their own success.