Analysis: What's in, what's out for seniors in the American Rescue Plan

Washington Watch

The American Rescue Plan (ARP) coronavirus stimulus package, which President Joe Biden signed into law in March, was designed to defeat the virus, get vaccines in the arms of Americans, checks in the pockets of those who need it, and jump-start the U.S. economy back to health, including safely re-opening schools.

This bill is so large in scale – $1.9 trillion – that Republicans in both chambers opposed the legislation unanimously, characterizing it as bloated, crammed with what House Republican leader Kevin McCarthy called a “liberal wish list.”

The bloated part is debatable, depending on political perspective, but there is no question the package is a massive, unprecedented effort to shore up the economy. The cost is roughly double the stimulus package that President Barack Obama signed into law during the Great Recession in 2009. This price tag is on top of the $2.2 trillion and $900 billion bills, two of the five coronavirus relief bills that Congress has approved since the pandemic struck a year ago. Those happened with Republican support under then-president Donald Trump.This legislation is far more than just a coronavirus-focused bill. It makes one of the biggest federal efforts in decades to assist lower-and-middle-income families. It includes the most ambitious anti-poverty initiative in a generation, including expanded tax credits over the next year for children, child care and family leave – some of which Democrats have signaled they’d like to make permanent. It also provides spending to help:


money to re-open schools

food assistance programs

help with people’s utility bills

extended boost to unemployment insurance

help for farmers of color

help for student borrowers

aid to ailing industries from restaurants to airlines to concert halls.

The bill also includes relief for states, local and tribal governments, many who weathered tax revenue drops and intense budget tightening.

What’s in it for seniors?

To some long-time congressional Democrats, this bill is so monumental, they see it as the top achievement of their legislative careers. But while there is, in their eyes, much to celebrate, no one can forget the huge costs – a pandemic that has killed more than 527,000 people – equal to the populations of Kansas City or Atlanta or Sacramento. Roughly 40 percent of those deaths have been seniors living in nursing homes or assisted living facilities. It also plunged the economy into its deepest depths since the late 1920s Great Depression.

ACA changes. While the attention of the bill’s success has been on fixing the coronavirus issues, the legislation also brings with it another huge Biden campaign pledge -- the biggest changes to the Affordable Care Act law since its passage in 2010. The bill increases subsidies to people who buy ACA health plans. It would put the ACA law, still called Obamacare by most people, on sustained footing and at the same time, make health insurance affordable for middle class Americans who previously could not afford it.

What could these changes mean for you? For a 64-year-old person, who earned $58,000 last year, according to the Congressional Budget Office, the monthly health insurance payment would drop from $1,075 to $412 with the federal government covering the cost difference. A 60-year-old with a $55,000 income would see premiums drop between 50% to 80%, depending on the plan, according to a Kaiser Family Foundation analysis.

Currently under the ACA, people who earn 400% of the federal poverty level are not eligible for the tax credits, known as subsidies, that help offset the cost of buying health insurance. That means a single person who earns more than about $51,000 is not eligible. Neither, right now, is a family of three that makes about $87,000.

Older adults, particularly poor seniors, with incomes about 400% of poverty, would generally see some of the most significant savings, according to the Kaiser Family Foundation.

Medicare expansion. The ACA changes in the bill also aim funding to entice states that did not expand their Medicaid programs earlier to do that now. It includes strong new incentives to entice the 12 holdout states – including Texas, Wisconsin, Georgia, and Florida – to finally expand Medicaid to those with too much money to qualify for the federal health program for the poor, but too little to cover private coverage.

Pensions bailout. Another huge but controversial provision contained in the relief package is the $86 billion allotted to fixing failing multi-employer pensions. The money is a taxpayer bailout for about 185 union pension plans that are so close to collapse that without the rescue, more than 1 million retired truck drivers, retail clerks, builders and others could be forced to forgo retirement income. The plans cover about 10.7 million active and retired workers, many of whom are middle class and work in fields such as construction or entertainment where the workers move from job to job.

COBRA payments. The legislation also provides more relief for people who have lost their jobs and need health insurance. People who lose their jobs can remain on their employers’ health plans for up to 18 months under a program known as COBRA – an insurance continuation program – that employers are, in most circumstances, required to offer workers who have been terminated. But under COBRA, the laid off worker must pay a monthly premium. Under the new law, the government would subsidize all those premiums.

Among his first executive orders, Biden quickly took a few additional steps toward fixing the ACA. In January, to help those people who lost jobs and health care coverage during the pandemic, Biden re-opened the ACA marketplaces to allow people to sign up to obtain coverage. He also took steps to restore coverage mandates that had been undermined by President Donald Trump, including protecting those with pre-existing medical conditions.

What this bill doesn’t do

Medicare for All. As substantive as the ACA fixes are in the coronavirus relief package, solidifying the ACA law remains only a patchwork approach to health care coverage. During the 2020 presidential campaign, progressive Democrats pushed for a Medicare for All, a government-run health care plan. While Medicare for All remains a viable political issue moving forward, what is missing from the ACA success is the Biden-promised public option – a government-run plan that Americans could choose on the health law’s online marketplaces, which now includes only private insurance.

Medicare age eligibility. Also missing is another Biden campaign pledge – lowering the age eligibility of Medicare from 65 to 60, which will face fierce objections from hospitals and other companies that could see their profits erode. These battles still could be fought, but success is extremely unlikely with the tiny Democratic majorities in the sharply divided U.S. Senate and House. Nonetheless, progressives are going to hold Biden to deliver on this promise.

Just to be clear, these Obamacare fixes are not Biden’s actual health care plan, just the first few steps. It is unclear when Biden will get around to even proposing his health care agenda. The new president has a long list of other legislative priorities, while focusing on implementing the coronavirus and economic recovery plans.

Also contributing: New York Times, Washington Post, Wall Street Journal, CNBC and AP.

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