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Millions of Americans will continue to be able to afford their individual health insurance coverage under the Affordable Care Act (ACA) because the Inflation Reduction Act of 2022 extends expanded premium assistance for the next three years.
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The American Rescue Plan, enacted in 2021, enhanced premium subsidies for ACA plans, but that additional assistance was scheduled to go away at the end of 2022. Had the ACA subsidy improvements not been in place in 2022, the nonpartisan Kaiser Family Foundation estimates that in the 33 states that use the ACA’s federal Health Insurance Marketplace, premiums enrollees paid would have been 53 percent higher. The foundation also predicted that more than 3 million Americans could lose their health coverage if the subsidy support wasn’t extended because they couldn’t afford the premiums. The new law will extend this subsidy support through 2025.
“It cannot be overstated just how impactful the enhanced financial support is for people buying health care in the marketplace, particularly at a time when pocketbooks are strained,” says Megan O’Reilly, AARP vice president of government affairs for health and family. “These subsidies are particularly important for people ages 50 to 64 who saw an average savings of over $950 annually as a result of this assistance and, as we know, already pay up to three times more than someone younger.”
