Tax credit extension protects affordable coverage for millions of Americans
On August 16, President Joe Biden signed a $750 billion healthcare, tax and climate bill into law. The legislation, referred to as the 2022 Inflation Reduction Act, will extend Affordable Care Act (ACA) premium tax credits to help millions of Americans pay for health care. Those tax credits were set to expire at the end of the year, a scenario that would have raised costs and reduced coverage for millions of Americans, according to the U.S. Department of Health and Human Services.
Blue Cross Blue Shield (BCBS) companies are applauding new legislation signed into law that will extend Affordable Care Act (ACA) tax credits for three years as part of the 2022 Inflation Reduction Act. This underscores Blue Cross and Blue Shield companies’ commitment to fight for greater access to affordable health care for every American. "This move keeps real money in the pocketbooks of Americans and gives them real peace of mind," said Kim Keck, BCBSA president and CEO.
The numbers: What it means
The passage of the Inflation Reduction Act comes at a time that nearly 13 million people depend on tax credits to afford health insurance through the ACA marketplace. Another 88 million are covered by Medicaid – an increase of 24% since the start of the COVID-19 pandemic. A recent Oliver Wyman analysis shows how extending ACA tax credits will impact millions across the country:
Without the extension, experts were predicting dire financial consequences for Americans already struggling with price increases on basic needs due to inflation, like food and gasoline. For example, a household of four that depends on these credits today may have seen its share of premiums double— effectively pricing millions out of health insurance. Conservative estimates placed this number at 5.1 million newly uninsured Americans, while broader estimates anticipated up to 14.2 million would have lost Medicaid coverage.
Making health care affordable
BCBS companies’ support for the tax credit extension is just one way that Blue Cross and Blue Shield companies are addressing affordability in health care:
- Value based care – BCBS companies are prioritizing preventative and primary care with the expansion of the patient-centered medical homes. The concept continues to expand across the country as providers demonstrate that improving quality of care can simultaneously drive down overall costs for patients and incentivize preventative treatment to improve health outcomes.
- Cost transparency - BCBS companies provide cost transparency tools that allow members to compare the costs of more than 1,600 procedures based on their individual benefit plan, which ultimately saves money.
- Prescription drugs Diabetes ranks seventh among the leading causes of death in the U.S. yet some diabetics have seen the cost of insulin spike 1300%. BCBS companies are taking action by partnering with CivicaRx to manufacture and distribute insulin at significantly lower prices compared to traditional drug manufacturers.
Learn more about how BCBS companies are leading efforts to make high-quality health care cost-effective and sustainably affordable.
The Blue Cross and Blue Shield Association is a national federation of 34 independent, community-based and locally operated Blue Cross and Blue Shield companies that collectively provide health care coverage for one in three Americans.