Health

White House aims to permanently extend ACA subsidy boost as part of $1.8 trillion package

The White House wants to make permanent a generous boost to income-based tax subsidies that lower the cost of Affordable Care Act plans.

The administration released a proposal Wednesday for a $1.8 trillion American Families Plan, which makes major investments in child and family care.

A key part of the plan is to make permanent a two-year subsidy boost included in the $1.9 trillion American Rescue Plan Act that Congress passed back in March.

The law makes it so that those making 150% above the federal poverty level can get fully subsidized coverage. Previously they had to pay no more than 4.3% of their income on healthcare.

Another major change is that people who make 400% above the poverty level can qualify for subsidies and would not have to pay more than 8.5% of their income on healthcare. The ACA originally cut off income-based subsidies for people that made 400% above the level.

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However, the subsidies are set to expire after the 2022 coverage year.

The new subsidies could benefit roughly 9 million people, senior administration officials said during a call on late Tuesday.

But the legislation also does not include several major Democratic healthcare priorities, including action on tackling drug prices or lowering the Medicare eligibility age.

The House recently reintroduced legislation that would give Medicare the power to negotiate for lower drug prices, but it remains unclear if that legislation would be bunded together with this package.

Senior administration officials said that Biden “remains fully committed to negotiations to reduced prescription drug prices.”

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