Most coverage of Joe Biden's American Rescue Plan focuses on the $1,400 checks Americans are becoming as we speak. But buried within the plan is a provision that should help ordinary citizens pay for their health care. Because for the next two years , the ARP will get rid of what Obamacare critics describe as the \”subsidy cliff.\”
The subsidy cliff is the reason many middle-class Americans thought that Obamacare was good for those less well off, but left them out in the cold.
In the Affordable Care Behave as originally passed, public subsidies for private market purchase health care weren't area of the plan for people making more than 400 percent from the federal poverty level. Translation: No help for people making $51,000 and above; couples making $68,960 or even more; or a family of four making more than $104,800.
The American Rescue Plan caps any healthcare payment at 8.Five percent of income and makes up the difference with a federal subsidy. Which will means significant reductions in healthcare costs for middle-class Americans over the next two years. It will likely culminate with Biden pushing this policy to become permanent part in 2023.
And daring Republicans to object.
How much will these savings be? For many people, they'll be a lot more than the $1,400 stimulus checks.
These numbers derive from the national health care payment averages and could be different in different states:
- For a 60-year-old making $55,000 that has health care now, the current payment per month for the benchmark silver plan averages $887 per month. The new plan reduces that cost to $390 a month with the federal subsidy-a savings of almost $6,000 a year.
- For a 60-year-old couple making a combined $75,000 a year, they're paying $1,920 a month now. Under the ARP that will drop to $531-a savings of about $1,400 a month and $16,000 annually.
- A family of four with an salary of $120,000 will save $595 a month, which translates to about $7,000 a year.
The new subsidy doesn't only help those near middle-age. A 40-year-old making $55,000 helps you to save about $800 a year while a 27-year-old making exactly the same amount will save about $300 a year.
The Kaiser Family Foundation estimates that about 8 million people are currently buying unsubsidized plans and paying full-price for the Affordable Care Act. An estimated 3.4 million people did not have the insurance because of this subsidy cliff, which ruled they made too much money to qualify for help.
What Biden has done here is simple in theory, but hard to execute: He's answered voters who say their health care premiums are too high by providing them a check to lower the cost.
At the same time he has set the table to ensure that for the next two elections Democrats can explain that not one single Republican in Congress voted for any bill which gave a $2,800 in stimulus check and $32,000 in healthcare savings to a 60-year-old couple residing in, say, North Carolina.
If Republicans want to reason that they had to voted against the American Rescue Plan because of their deeply-held convictions on fiscal responsibility-or because they're super-duper worried about socialism-the public will likely take into account that more nonsense. Voters don't pay attention to that when the money is in their banking account.
Also, because some red states haven't took part in Medicaid expansion , the health care savings from ARP is going to be smaller in some states than others.
For example, the 60-year-old in California making $55,000 annually will save $176 a month. The savings are relatively small in other blue states like Massachusetts , New York , and Colorado as well.
But that very same aged person in North Carolina helps you to save $705 a month; in Pennsylvania $537 per month; in Florida $578 a month; in Wisconsin $580 a month; in Georgia $576 a month; in Texas $527 a month; and in Arizona $535 a month.
Matt Gaetz said on Fox News last week that when Kamala Harris shakes Joe Biden's hand \”she's checking his pulse.\”
But someone in Sleepy Joe's policy orbit has been paying attention, because there are about 25 million people employed in the 55-64 age group. The average yearly pay for those folks is about $58,000. Which means a large percentage of them will get big savings on their health care costs over the next 2 yrs, for sure.
The GOP can joke about checking Biden's pulse. But the old man has been paying attention to what voters actually care about. Maybe Matt Gaetz can explain to Floridians why he doesn't think people in their early 60s shouldn't save $7,000 a year on their health insurance.
Good luck with that.