DENVER – A new analysis by the Brookings Institution highlights the significant new resources made available for Americans to obtain affordable health coverage under the recently-enacted American Rescue Plan Act (ARPA), which builds on what’s working in health care. At a time when some states, including Colorado, are considering creating unaffordable new state government-controlled health insurance systems, the analysis cautions that “the potential for future action requires states to remain nimble in their decision-making.”

As Colorado lawmakers consider HB21-1232 to create a new state government-controlled health insurance system known as the state government option, the expansion of the new federal resources available to lower insurance premiums for Coloradans has “profound implications for state health policy, aiding state efforts to make coverage more affordable and accessible,” the Brookings analysis finds. 

Coloradans who previously did not qualify for assistance are now able to obtain affordable coverage, thanks to ARPA’s expanded Affordable Care Act subsidies, new COBRA subsidies and additional Medicaid coverage.

The American Rescue Plan Act (ARPA) Increases Federal Subsidies Available To Coloradans In Two Key Ways:

• Broadens eligibility. Makes Coloradans at higher income levels eligible for premium subsidies on individual market coverage, and removes the current 400 percent Federal Poverty Level (FPL) eligibility cap of $51,520 for individuals and $106,000 for a family of four.
   
• Increases affordability. Increases the premium subsidy amounts that go to individuals enrolled in individual market coverage.

A recent analysis by the Colorado Health Insurance Affordability Board estimates the newly available federal subsidies for Coloradans at 400 percent FPL and below will decrease monthly premiums by 17–33 percent and total ACA enrollment is expected to increase by almost 19 percent. 

During 2021 and 2022, individuals and families above the income cutoff can access premium tax credits and the amount they could pay will be capped at no more than 8.5 percent of their household income for a plan purchased through the state or federal marketplaces.

A recent analysis by the Urban Institute weighs the possibility of making the new expanded federal subsidies permanent, instead of limited to 2021 and 2022. The new analysis by the Brookings Institution also considers this possibility by suggesting, “states must account for a number of policymaking considerations in light of the PTC [Premium Tax Credit] expansion and uncertainty about future federal action,” and concludes states should “caution against making lasting changes until matters are clearer.”

During a recent hearing before the Colorado House Health and Insurance Committee to consider the proposal to create a new state government option in Colorado, Janie Wade, Executive Vice President and Chief Financial Officer for SCL Health questioned the need for the proposed state government option since “the increase in the premium subsidies offered under the American Rescue Plan will go even further and make health care more affordable for Colorado families.”

It’s time for Colorado lawmakers to slow down, consider the significant benefits of new federal policies for expanding affordable coverage, and not rush through an unaffordable proposal for a state government-controlled health insurance system that puts Colorado’s economic recovery and integrated health care system at risk.

• To read the analysis by the Brookings Institution, CLICK HERE.
   
• To read the analysis by the Urban Institute, CLICK HERE.