Subsidies enacted a year into the COVID-19 pandemic to expand eligibility and offset premium costs of insurance purchased on Affordable Care Act (ACA) marketplaces led to significant enrollment gains among eligible children ages 18 and under, Black and Hispanic individuals, and residents of rural areas, according to a new study by a researcher at the Johns Hopkins Bloomberg School of Public Health.
Overall, the proportion of marketplace enrollment among eligible individuals—including those with ACA marketplace plans and those who were uninsured—increased by an estimated 6.7 percentage points, a 27.5% increase, after the subsidies were implemented in March 2021. The study compared 2018–2019 enrollment among eligible individuals versus 2021–2022.
The study was published online February 13 in the Journal of Health Care for the Poor and Underserved.
The Affordable Care Act, enacted in 2010, expanded health insurance access by offering private health insurance plans through marketplaces in all 50 states and the District of Columbia. Eligible individuals can obtain subsidies to purchase coverage through the marketplace with premiums that vary based on their income.
The American Rescue Plan Act (ARPA) of 2021 and Inflation Reduction Act (IRA) of 2022 enhanced ACA subsidies through the end of last year. Now expired, marketplace enrollment will likely drop absent renewal or alternative subsidies. Costs for current enrollees have already increased, according to media reports and policy forecasts.
"Lowering premium costs translated into higher enrollment, particularly for populations that have historically faced greater barriers to coverage," says study author, Paul Jacobs , PhD, an associate scientist in the Bloomberg School's Department of Health Policy and Management. "The enhanced subsidies meaningfully improved affordability and access—which suggests that their recent expiration will likely reverse these gains."
Jacobs calculated marketplace take-up—the percentage of eligible individuals who enrolled in marketplace coverage—across key groups before and after the subsidies were implemented in March 2021. Health policy researchers use marketplace take-up—instead of raw enrollment totals—to estimate how a policy change might influence enrollment decisions. For the analysis, Jacobs used nationally representative data from the 2018–2022 Medical Expenditure Panel Survey.
Key take-up findings include:
- Among non-Hispanic Black individuals, marketplace enrollment among eligible individuals more than tripled, from 10.3% prior to the subsidies to 31.0% after implementation.
- Among Hispanic individuals, enrollment among eligible individuals increased about three-quarters, rising from 13.3% to 23.4%.
- Among rural residents, enrollment among eligible individuals more than doubled, from 12.6% to 25.6%.
- Among children 18 and under, enrollment among eligible individuals nearly doubled, from 18% to 35.8%.
- Among part-time workers, enrollment among eligible individuals increased by more than two-thirds, from 20.2% to 34.5%.
The analysis also found that 7.8 million enrollees retained marketplace coverage over the 2021–2022 period compared with 5.5 million over the 2018–19 period.
"These are not incidental changes," Jacobs says. "Before the enhanced subsidies, there were large gaps in who took up marketplace coverage across racial and ethnic groups. After the subsidies, those gaps essentially disappeared. This tells us the enhanced subsidies changed who could realistically afford insurance."
The ACA originally tied premium contributions to income. However, many middle-income households still faced high costs. Those earning just over four times the federal poverty level—$111,000 for a family of four in 2022, according to the U.S. Department of Health and Human Services—were ineligible for subsidies before the ARPA/IRA reforms.
In addition to lowering premiums and expanding income eligibility, the ARPA/IRA reforms capped premiums at 8.5% of income and expanded access to zero-premium plans for many enrollees. Together these changes dramatically reduced the net cost of coverage. The paper notes that before the enhanced subsidies were implemented, a family of four earning twice the federal poverty level—$55,500 in 2022—paid about 6.5% of its income for a benchmark plan; under the enhanced subsidies, that share had fallen to about 2%.
The paper notes that factors beyond the enhanced subsidies may have also caused changes in enrollment.
"These results suggest that marketplace enrollment will decline among key groups without the enhanced subsidies," Jacobs says. "That would widen longstanding disparities in insurance coverage for groups that have been historically priced out of coverage."
" Take Up of Marketplace Insurance Increased After Enhanced Premium Subsidies " was authored by Paul D. Jacobs.
