American Rescue Plan Act (ARPA) Expire at End of 2022

The expiration of American Rescue Plan Act (ARPA) subsidies at the end of 2022 may result in 3 million members losing coverage. Reduced subsidies is a scary possibility that will come in the middle of Open Enrollment 2023 and Medicaid Unwinding.

To stay ahead of this deadline, brokers must plan now to prevent their clients from losing coverage.

ARPA increased affordability and extended member access plans

The Marketplace’s increased availability of zero- and low-premium plans was a key factor in Open Enrollment 2022’s success. The ARPA contributed to a record 14.5 million individuals enrolling in 2022 Marketplace coverage, a 21% increase compared to the 2021.

How did ARPA achieve success?

  • Lowering the premium contribution limit for households between 100-400% of the federal poverty level (FPL)
  • Offering no-premium coverage for households from 100-150% FPL
  • Lowering the premium contribution limit to 8.5% and extending tax credits for the first time to households above 400% FPL

ARPA set to expire at the end of 2022

At the end of 2022, the transition from zero to low premium plans may result in millions of members losing coverage. Members that transitioned to plans that cost as low as $1 per month will need to establish payment channels. The more hurdles one has to jump through, the more limited the coverage becomes.

Experts project that 15% of those currently enrolled in the Marketplace would lose coverage without the increased tax credits. Most of these individuals that will become uninsured fall between 133% and 400% FPL. Those above 400% of the FPL will lose all their tax credits.

In rural areas, older individuals who have relatively high income levels are at a high risk of overpaying for insurance.

Protect your clients from coverage loss

While some state base marketplaces (SBMs) will auto-enroll eligible clients once coverage changes, brokers can’t rely on states. Brokers must be the first line of defense for preventing catastrophic coverage losses by communicating with at-risk clients early.

Inform them of potential subsidy changes. If a client is no longer eligible for reasonably priced plans, explain the changes and guide them to the next steps.

Invest in automated messaging

Investing in automation will save brokers resources in the long run. Personalized fields and an integrated client dashboard will help brokers increase messaging output with minimal effort. They will be able to compile and organize all their clients’ detailed information on a single interface, which is very useful in targeting at-risk demographics.

In addition to automated messaging, brokers must also have a multi-channel approach that makes the most of the technology available. Many of those at risk of losing coverage do not have access to all traditional means of communication. Make sure to make the extra effort to adjust your outreach channels based on what performs best for each demographic.

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