Millions of Americans are set to pay more for health care in the new year, after Republicans failed to extend Affordable Care Act subsidies.
On Wednesday’s “Morning Joe,” economic analyst Steve Rattner explained how the rising costs would affect lower- and middle-income Americans and why those in Republican-controlled states may be hit even harder.
“Health care is an unbelievably confusing subject, so it seemed to me we might start with a little bit of level-setting just to help people understand what we’re talking about,” Rattner said, before sharing data from the Kaiser Family Foundation that shows where Americans get their health insurance.
While most Americans receive coverage through their employer, or through Medicaid and Medicare, 21 million people get their plans through the marketplace, which was established by the ACA. As Rattner pointed out, these millions of Americans are now at risk, after tax credits expired on Jan. 1.
Rattner explained that under the Biden administration, additional tax credits were approved to help more Americans afford health care under the ACA.
“Roughly everybody who buys health care in the marketplace gets a subsidy,” he said. “These are essentially all lower-income people near the poverty line,” which for an individual is $16,000. “So you can imagine, none of these people make a heck of a lot of money, by American standards, and so the subsidies are a key element of why they’re able to do this,” Rattner added.
He said the price increase for lower-income Americans “is not close to being marginal” and called it “absolutely back-breaking.”
Rattner broke down the math for viewers. “Let’s just take somebody who makes $35,000 a year; he or she was paying about $1,000 for their health care. It is now going to go up by $1,600 to $2,600.”
The former Treasury official also pointed out that the effects of the lapsing subsidies would not be felt equally across the country, labeling red states “the biggest losers in this.”
“Red states did not opt into the expansion of Medicaid that was passed under the Affordable Care Act, and so a lot of their folks, because they did not opt into these Medicaid expansions, went into the marketplace, and so they have a disproportionately large number of people buying their insurance through the mechanism I just described,” Rattner explained.
You can watch Rattner’s full analysis in the clip at the top of the page.
Allison Detzel is an editor/producer for MS NOW.