(Bloomberg) -- Monthly premiums for health coverage through the Affordable Care Act federal marketplace fell an average of 40% because of a boost in subsidies from government stimulus funds, the Biden administration said.
More than 1.5 million people have enrolled in health plans through the HealthCare.gov marketplace since the administration opened a special window Feb. 15. Another 2.5 million who already had coverage took advantage of expanded assistance created by the American Rescue Plan stimulus that President Joe Biden signed into law in March.
Biden has prioritized expanding enrollment and lowering premium costs in the ACA exchanges, a reversal from his predecessor Donald Trump, who sought to dismantle Obamacare. The shift has boosted enrollment for companies like Centene (NYSE:CNC) Corp. that sell ACA coverage and enticed other insurers back to the marketplace. CVS Health Corp (NYSE:CVS). said Wednesday that its Aetna (NYSE:AET) unit planned to offer plans in new states next year.
Average premiums for returning customers in the 36 states using the federal marketplace dropped from $104 a month to $62 a month, according to data from the Department of Health and Human Services.
The $1.9 trillion American Rescue Plan expanded the number of people eligible for subsidies for ACA marketplace coverage. It also bolstered the tax credits for those already purchasing coverage to make the plans more affordable.
For the first time it extended subsidies to people making more than 400% of the federal poverty level -- $106,000 for a family of four -- a group that had faced steep costs for insurance coverage. Their costs are now capped at 8.5% of income.
The expanded premium assistance is set to expire after 2022, but Democrats are seeking to extend it. The provision is projected to cost $34 billion, according to the Congressional Budget Office.
“Health coverage is more affordable than ever for new and returning Americans at HealthCare.gov,” HHS Secretary Xavier Becerra said in a statement.
The more generous tax credits took effect April 1. Americans can enroll in HealthCare.gov coverage through August 15.
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