ACA Subsidies: Understanding the Impact of the ARPA Expansion and Future Costs

The American Rescue Plan Act (ARPA), passed in March 2021, expanded the Affordable Care Act (ACA) subsidies, making health insurance more affordable for millions of Americans. However, its provisions are set to expire in 2024, leaving many wondering about the future cost of coverage.

The ARPA Subsidy Expansion

Prior to ARPA, the ACA provided subsidies to individuals and families below a certain income threshold to help them purchase health insurance through the Health Insurance Marketplace. ARPA significantly increased the amount of these subsidies, making coverage more affordable for many more people.

The Impact of the Subsidy Expiration

When the ARPA subsidies expire in 2024, the cost of health insurance for those who currently receive subsidies will likely increase significantly. The exact impact will vary depending on a number of factors, including income, family size, and location.

According to the Kaiser Family Foundation, a nonpartisan health research organization, an average family of four earning $50,000 per year could see their monthly premiums increase by nearly $1,000 per year once the ARPA subsidies expire.

Planning for the Future

If you currently receive ACA subsidies, it is important to start planning for the potential increase in costs. Here are a few things you can do:

Estimate your premium costs: You can use the Health Insurance Marketplace calculator to estimate your premium costs once the ARPA subsidies expire. This will give you an idea of the potential increase in costs.
Consider your budget: Determine how you will pay for the increased premiums. This may involve making adjustments to your monthly expenses or looking for additional sources of income.
Explore other coverage options: If you are currently receiving ACA subsidies, you may be eligible for other government programs that provide financial assistance for health insurance, such as Medicaid or the Children’s Health Insurance Program (CHIP).
Seek professional advice: A licensed insurance agent can help you understand your options and find the best coverage for your needs.

The expiration of the ARPA subsidies will have a significant impact on the cost of health insurance for millions of Americans. By planning ahead and exploring your options, you can prepare for the potential increase in costs and ensure that you continue to have access to affordable health insurance.