Nineteen State-Based Marketplaces Agree with Proposal to Expand Federal Help to Lower Health Coverage Costs for Millions

Washington DC — Nineteen diverse, state-based marketplaces representing states that account for 42 percent of the nation’s population have united to encourage more affordable insurance coverage, a goal advanced in President’s Biden’s American Rescue Plan. In a letter to Congressional leaders, the states concluded that the President’s proposal to expand federal subsidies and eliminate the “subsidy cliff” are two of the most effective strategies to make coverage more affordable.

Through enhanced federal subsidies, the Biden plan would protect consumers by ensuring that no one would pay more than 8.5 percent of their income for health coverage. The plan would expand eligibility for subsidies to consumers earning more than 400 percent of the federal poverty level ($51,552 per year) and increase subsidies to those earning between 100 to 400 percent of FPL who already qualify.

The added support comes at a critical time as millions of Americans grapple with the ongoing effects of the COVID-19 pandemic and economic recession, including the estimated 15 million individuals who have lost employer-based health insurance. The state-based marketplaces have served as a critical source of coverage. In 2019, over 4 million individuals enrolled in private insurance coverage through these marketplaces.

“The pandemic and its economic consequences continue to be a painful reality, making health coverage more important than ever,” said Trish Riley, executive director of the National Academy for State Health Policy (NASHP). “These 19 states have been on the frontlines, working with families to secure affordable health insurance and experiencing first-hand the impact of job loss and economic insecurity on consumers. They know that expanded subsidies will help the uninsured get coverage and help those covered keep their coverage.”

In their letter, the marketplace leaders wrote that they stand ready to implement the President’s proposals and supported the need to extend subsidies at least through 2022 given that the labor market is not predicted to rebound in the near future. A multi-year extension would lower health care costs throughout the individual market, spur enrollment, and help boost the economy, they noted.

NASHP is home to the State Health Exchange Leadership Network, a consortium of state leaders and staff dedicated to the operation of state-based marketplaces and state-based marketplaces that use the federal platform.