Will the new stimulus legislation lower your insurance bill?


The possibility of a public option to expand health insurance is gone, shelved for the foreseeable future by Congress which never seriously considered it.

Some Americans had high hopes last fall that the public option, first discussed during debate on the Affordable Care Act (ACA) in 2009, might receive serious consideration since the pandemic has stripped millions of people of their health coverage.

After all, when he was a candidate, President Biden noted his strategy for expanding coverage was to build on the ACA and expand coverage through a public option. That would give people a choice of buying coverage from the federal government or from profit-making insurance companies as they do now. The idea had popular support. Right before the election a New York Times Sienna College poll of likely voters found that 67 percent supported a public option compared to 55 percent who said they supported the ACA.

Instead of choosing to fight the enemies of a public option — big insurers, powerful medical providers and employers — Congress opted for the low-hanging fruit, a small expansion of Obamacare subsidies. Essentially the stimulus law won’t substantially reduce the 29 million Americans who still are uninsured. They will simply make insurance cheaper for some people already insured.

The law calls for increases in tax credits already available to help people buy insurance. Credits may be high enough to pay for a silver plan for those with incomes around $19,000 while lowering premiums for those with incomes around $60,000. Subsidies may be large enough for low-income families to get a free silver plan and special benefits to cover deductibles and co-payments. Families and individuals with incomes greater than 400 percent of the poverty level, $51,000 for a single person and $105,000 for a family of four will now qualify for help.

For people currently collecting unemployment insurance, there are also short-term subsidies to buy Obamacare policies. If you collect unemployment during this year, you will qualify for a free silver plan with special coverage to help lower your deductibles and co-pays.

Subsidies called for under the new law are intended to help people pay premiums. For many people they do little to address the other costs associated with health insurance policies — deductibles, coinsurance and co-pays. A policy with a low premium usually comes with high deductibles, high coinsurance, and co-pays. It’s just the opposite if you pick a policy with a high premium. You get a break on the cost sharing.

To see how high some of this cost sharing can be, I checked the HealthCare.gov website for policies offered to a single person in Indiana by CareSource. For 10 bronze and silver policies, the out-of-pocket maximums ranged from $8,550 to $7,000, and deductibles ranged from $8,300 to $5,100. Even these relatively “low” amounts — they much larger for family policies — that’s a good chunk of money to pay out of pocket before getting help with medical expenses.

The stimulus law also threw a bone to people who lost coverage from an employer because of the pandemic. When someone leaves a job, they are usually eligible for 18 months of COBRA coverage from their employer as long as they pay their own premiums. That’s an expensive option for people who’ve just lost a job.

The new law now gives them up to six months of free coverage if they’ve lost their job in the past year. After Sept. 30, 2021, they pay the full amount to stay on the employer’s insurance.

“Congress took the path of least resistance with COBRA,” says former Cigna insurance executive Wendell Potter. “The industry wants it, but it’s the most inefficient thing the federal government could do to give people coverage. COBRA expansion is costly and a huge waste of federal dollars,” Potter said, adding those expansions “are just enriching the insurance industry which doesn’t need enriching. Many companies had their most profitable year ever.”

The publication Business Insider reported the federal government had sent insurers $61.3 billion for two years of help with insurance costs. The assistance will end unless Congress re-ups in two years.

Despite all the money spent, we are still left with millions of uninsured people and some 40 percent of working age adults who had inadequate health insurance when the pandemic began.

As I was finishing this column, I saw a tweet from a woman named Arielle who seemed to sum up where we are: “A public option isn’t even being discussed now,” she said, “after we spent so much time debating Medicare for All during the Democratic primary.”

It’s like both options just faded away.

What’s your solution for fixing health care costs and coverage? Write to Trudy at [email protected].

Trudy Lieberman, a journalist for more than 40 years, is a contributing editor to the Columbia Journalism Review where she blogs about health care and retirement at cjr.org. Her blog posts are at cjr.org/author/trudy-lieberman-1/. She also is a fellow at the Center for Advancing Health where she blogs about health at preparedpatientforum.org/. Her blog posts are at blog.preparedpatientforum.org/blog/category/author/trudy-lieberman/. Send comments to [email protected].

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