The Affordability Of Individual-Market Health Insurance In California Under The American Rescue Plan Act, 2021

Area of Science:

• Health Economics
• Public Health Policy
• Insurance Markets

Background:

• The American Rescue Plan Act (ARPA) of 2021 enhanced Affordable Care Act (ACA) Marketplace subsidies.
• This included zero-premium "silver 94" plans for unemployment compensation recipients, covering 94% of medical costs.

Purpose of the Study:

• To evaluate the impact of ARPA subsidies on enrollees in California's individual insurance market in 2021.
• To identify potential missed opportunities for optimal subsidy utilization among eligible enrollees.

Main Methods:

• Analysis of adult enrollee data for on- and off-Marketplace individual plans in California during 2021.
• Examination of enrollee demographics, income levels, unemployment compensation receipt, and reported experiences with premium affordability and healthcare access.

Main Results:

• 41% of enrollees reported incomes at or below 400% of the federal poverty level; 39% received unemployment compensation.
• 72% reported no difficulty paying premiums, and 76% stated out-of-pocket costs did not impede care seeking.
• A significant portion of subsidy-eligible individuals enrolled in off-Marketplace plans (6-8%) or less comprehensive Marketplace bronze plans (over 25%), facing greater affordability challenges.

Conclusions:

• While ARPA subsidies improved affordability for many ACA Marketplace enrollees, gaps in optimal plan selection persist.
• Enrollees in off-Marketplace or bronze plans were more likely to experience premium difficulties or cost-related care delays.
• Future subsidy expansions, like those under the Inflation Reduction Act, should prioritize consumer navigation to high-value, subsidy-eligible plans to address remaining affordability issues.