Congressional Action Required to Keep Health Coverage Affordable for Many 50- to 64- Year Olds

Affordability of health insurance is a major issue for adults ages 50 to 64. And thanks to the American Rescue Plan Act (ARPA) of 2021, individual health coverage has become much more affordable for older adults. Among other provisions, the law increased financial assistance to help people afford Marketplace health coverage available under the Affordable Care Act (ACA). Coupled with an extended special enrollment period available earlier this year, the expanded financial assistance made available by ARPA has already led to millions more Americans newly enrolling in affordable health coverage. The Marketplace also became more racially and ethnically diverse, with a greater share of enrollees identifying as Hispanic or Black compared to prior years.

But these coverage gains may be only temporary. The law only authorized this expanded financial assistance for two years – until December 31, 2022. This means that starting in 2023, many older adults will once again face higher premiums – or be forced to drop their coverage – unless the ARPA tax credit changes are extended.

Because of the significant potential impact on health security, AARP commissioned a study to estimate the impact of the current ARPA tax credit expansions on adults ages 50 to 64, as well as what would happen if these provisions expired.  The study underlines the importance of the new tax credit expansion to keeping health coverage affordable, lowering uninsured rates, and closing racial and ethnic coverage disparities.

The study shows extending the ARPA tax credit expansions would mean: 
  

• 50- to 64-year-olds would continue to save as much as $4,700 in annual health insurance premiums. Under ARPA, older Marketplace enrollees at all income levels saw premium savings, including those eligible for premium subsidies before the law. Average premiums for enrollees ages 50 to 64 decreased 16 percent, or $954 per year. In total, older enrollees saved nearly $4.8 billion in premiums this year. If the ARPA tax credit changes are not extended, adults ages 50 to 64 would face higher premiums starting in 2023.
  
  • Those with incomes between 400 and 500 percent of the Federal Poverty Level (FPL) – $51,520 to $64,400 for a one-person household in most states – saw the largest savings under ARPA, as this group was ineligible for any financial assistance pre-ARPA. These savings are especially important for older adults who pay higher premiums because of “age rating,” where insurers can charge older adults up to three times higher premiums than younger adults.

• 2.1 million more older adults would enroll in Marketplace coverage by 2030. Avalere estimates that 5.9 million adults ages 50 to 64 would be enrolled in Marketplace coverage by 2030, compared to only 3.8 million if the provisions are allowed to sunset. The increased racial and ethnic diversity among 2021 Marketplace enrollees also indicates that further enrollment increases could lead to a narrowing in coverage disparities.

• Nearly 1 million fewer older adults would be uninsured by 2030. By the end of the two years that the ARPA provisions were authorized (2021-2022), an estimated 400,000 fewer 50- to 64- year-olds are estimated to be uninsured than would have been without tax credit enhancements. An ARPA tax credit extension would mean the trend would continue, with the number approaching nearly one million fewer older adults uninsured by 2030.

Extending ARPA’s tax credit expansions would help ensure continued access to affordable health coverage for millions of older adults ages 50 to 64 – including early retirees not yet eligible for Medicare, workers without access to job-based coverage, and self-employed adults.  Without this assistance, older adults ages 50 to 64 could once again face higher premiums, resulting in higher uninsured rates and potentially worsening racial and ethnic coverage disparities.