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American Rescue Plan Improvements to Covered California Affordability: Who Gains?

April 13, 2021

Research Report

Authors: Miranda Dietz, Srikanth Kadiyala, PhD, Tynan Challenor, Annie Rak, Dylan H. Roby, PhD, Laurel Lucia, MPP, Gerald F. Kominski, Ph.D.

Summary: The American Rescue Plan (ARP), a $1.9 trillion relief and recovery package passed last month, includes the first major federal improvements to the Affordable Care Act since it was passed over 10 years ago. The ARP substantially increases premium subsidies for coverage purchased through health insurance exchanges like Covered California.

Findings: Authors project that these subsidies will help over 1.6 million Californians, including 151,000 individual market enrollees who will qualify for subsidies for the first time and 135,000 uninsured people who will become insured. The benefits will be reversed, however, if the subsidies disappear in 2023 and are not made permanent. Despite the ARP’s substantial improvements in the affordability of coverage through Covered California, authors project that the state will still have 3.2 million uninsured Californians under age 65 in 2022, or approximately 9.5% of the population under age 65. (The authors' next blog post will focus on the Californians we project will be uninsured in 2022).

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