Dr. Swapna Reddy explains new ACA changes

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President Biden last week signed an executive order to strengthen the Affordable Care Act, expanding coverage and lowering costs. We spoke to Doctor Swapna Reddy of ASU’s College of Health Solutions to learn more about the changes.

The President announced a fix to the Affordable Care Act, what’s that all about?

Reddy: “In essence, what it is is it really determines whether families and individuals can receive subsidies. If they can receive government subsidies if their employer-based  healthcare is deemed unaffordable.”

“What’s defined as affordable is if your employer-based plan is under 10% of your income. Where that gets glitchy is if you want to add your spouse and a kid”

“Basically, the plan is still considered affordable as long as the employee’s plan is under 10%, even if the family’s premium as a whole is over 10%.”

The executive order would allow families to receive subsidies when the family plan exceeds 10% of income. The change would impact between 5 and 6 million people, Reddy said.

What about ACA costs born by taxpayers, how do those factor in?

Reddy: “There is a cost of course. There’s a cost to whenever we’re increasing subsidies. But again, when we take that 100-foot look it’s really about prevention, it’s about increasing access to insurance coverage again, for mostly healthy and younger families.”

“In the big picture, all the forecasts show that this will actually be a cost-savings measure, because we know that when folks have access to insurance they tend to healthier, they tend to use preventative care, and they tend to need less acute care, and costs as a whole will reduce for all of us, including taxpayers.”

President Biden last week at the anniversary mentioned that the ACA is stronger now than it’s ever been, do you agree with that?

Reddy: “There are some numbers here that are undeniable with the ACA. It is not a perfect piece of legislation and we all know that it has its challenges. I think what it has shown is its resilience. It has gone to the Supreme Court several times including last year, and for the most part is has hung on.”

“During the pandemic it served a really important role. During the open enrollment period for 2022, we have 14.5 million people that have enrolled. That is a record number.”

“What it really shows is that it’s not about whether people politically agree with the ACA, or liked President Obama, or like President Biden. It’s that people need affordable, comprehensive, accessible healthcare coverage, and for the moment it seems to be the best option for many people.”

Dr. Swapna Reddy / ASU College of Health Solutions

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