While Reconciliation Deal Makes Strides on Affordability, Equity Issues Remain in the Coverage Gap

Senate Democrats on Wednesday announced an agreement between Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) on a pared down budget reconciliation package aimed at helping families afford health care, lowering inflation and addressing climate change. Titled “The Inflation Reduction Act of 2022,” the bill includes critical and time sensitive health care provisions to bring down prescription drug prices and out-of-pocket costs, and extend health insurance tax credits to keep health coverage more affordable for millions of people. This is a big step forward. 

Community Catalyst and our partners continue to push for the inclusion of Medicaid coverage for 2.2 million people trapped in the coverage gap. Inequity in access to health care due to discriminatory barriers to economic security make clear this is a race equity and health justice issue, with 60 percent of people blocked from coverage being Black and brown. Failing to close the Medicaid coverage gap would continue to leave people with low incomes without realistic access to health care, perpetuating health and economic inequities that are rooted in systemic racism and discriminatory policy. It’s not an accident: because of systemic racism, millions have been purposefully shut out of care such that they do not know their bodies, cannot manage their own health, have substantial medical debt, and have unmet physical and mental health needs. They cannot wait any longer for care. 

In the coming days, Congress has the opportunity and responsibility to ensure that everyone has access to affordable health care at a time when millions of people are facing ballooning medical debt and financial uncertainty related to the cost of health care.     

Extension of Health Insurance Subsidies 

Originally set to expire this year, the American Rescue Plan Act (ARPA)’s enhanced premium tax credit subsidies, which have led to record enrollment, will be extended for three years through 2025. These enhanced Affordable Care Act subsidies have helped eliminate or reduce health insurance premiums for millions of people – making no-cost health insurance coverage available to people with incomes up to 150% of the federal poverty level and significantly reducing the cost of coverage for all people who get their coverage through ACA’s health insurance marketplaces. The extension of the ARPA premium subsidies is essential to ensuring access to affordable health coverage at a time when people across the country face uncertainty about being able to pay for the care they need. Along with the Biden administration’s proposal to fix the “Family Glitch,” this provision will help make affordable health coverage available to millions of children and families. 

Prescription Drug Reform & Vaccine Access 

The prescription drug reforms in this bill are estimatedto save $288 billion over ten years and reduce the cost of life saving drugs for millions of people. Among the bill’s most popular provisions is the requirement that the federal government to negotiate prices on some of the most expensive drugs covered by Medicare, which is widely supported by people across the political spectrum. The bill would also limit annual price increases on prescription drugs for Medicare and private insurance, imposing rebates on drug companies whose prices outpace inflation. In addition, the bill would reduce out-of-pocket costs for Medicare’s prescription drug program (Part D), expand subsidies for low-income beneficiaries, eliminate coinsurance above Medicare Part D’s catastrophic spending threshold starting in 2024, and cap out-of-pocket spending for Part D at $2,000 annually starting in 2025. 

The bill also expands access to vaccines under Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), eliminating cost-sharing for adult vaccines under Medicare Part D and requiring coverage of vaccines for all adults enrolled in Medicaid and CHIP. 

Work Left to Do  

If passed, The Inflation Reduction Actwould make a huge difference for millions of people by driving down prescription drug costs and keeping insurance premiums down through the Affordable Care Act.However, Community Catalyst and its partners continue to push for additional priorities that are critical to advancing race equity and health justice, including Medicaid coverage for the 2.2 million people trapped in the coverage gap in states that have not yet expanded Medicaid.  

Additional policies Community Catalyst will continue to advocate for alongside our partners at the state and federal level include: