Take-Up of Marketplace Coverage Increased After Enhanced Premium Subsidies

Abstract: In 2021, the American Rescue Plan Act (ARPA) in conjunction with the Inflation Reduction Act (IRA) increased premium subsidies to support the purchase of Marketplace coverage until the end of 2025. The ARPA/IRA enhanced subsidies substantially reduced the net-of-subsidy cost of Marketplace coverage. Using regression analysis of respondents to the Medical Expenditure Panel Survey (MEPS-HC) over the 2018–22 period, we assessed how Marketplace coverage changed after the implementation of the ARPA/IRA enhanced subsidies and which subgroups were particularly affected. We found a 6.7 percentage point increase in the proportion of Marketplace-eligible individuals who took up coverage after ARPA/IRA. Further, the proportion who took up coverage increased by 20.7 percentage points for non-Hispanic Black individuals and by 10.1 percentage points for Hispanic enrollees. These results strongly suggest that if Congress does not reauthorize the enhanced subsidies, a decline in Marketplace enrollment, especially among some minority groups, is likely to occur.