A proposed COVID-19 relief package boosts income-based tax credits that lower the premiums for customers on the Affordable Care Act’s (ACA's) exchanges, but only through 2022.
The House Ways and Means Committee shared details of several healthcare items to be considered as part of the $1.9 trillion package expected to be considered by Congress this month. In addition to the tax credit boost, the package would also give assistance to cover COBRA costs for consumers.
If signed into law, the bill would ensure that any household that has income 400% above the federal poverty level and higher only pays 8.5% of their income on healthcare. Under current law, consumers making above 400% are not eligible for premium tax credits.
The legislation also gives a boost for lower-income customers as well. For example, those making 150% above the federal poverty level now can get fully subsidized coverage. Under current law, they must pay no more than 4.3% of their income on healthcare.
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The new tax credits would only be in effect from 2021 to 2022.
The legislation would also prevent the federal government from recapturing any excessive tax credits that consumers got in 2020.
It would also boost ACA subsidies for people who recently lost their job. For 2021, an individual on unemployment would get an advanced premium tax credit as if their income was no higher than 133% above the federal poverty level.
Boosting ACA subsidies was a key pillar of President Biden’s healthcare plan.
The bill also would provide premium assistance to cover 85% for COBRA continuous coverage for any eligible individuals and families through Sept. 31.
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The legislation would also create an extension of the COBRA election period and specifies when coverage can start.
The package will use a parliamentary procedure called reconciliation that enables a bill to pass the Senate through a simple majority and avoid a legislative filibuster that must take 60 votes to break. But a reconciliation package can only focus on certain spending and budgetary items.
The Ways and Means Committee will hold a markup on Wednesday of the legislation.