Inflation Reduction Act signed into law
President Biden signed the Inflation Reduction Act into law on Aug. 16, which will raise over $700 billion in revenue over 10 years and spend over $430 billion. The law addresses tax reform and climate change and makes health care more affordable for Coloradans. Specifically, the law addresses prescription drug costs in Medicare and extends the additional health insurance subsidies on the Affordable Care Act (ACA) marketplaces (including Connect for Health Colorado) that were originally established in the American Rescue Plan Act (ARPA) for three years.
The Children’s Campaign applauds this extension of health insurance subsidies. The Urban Institute has projected that nearly one million children and parents across the country — including approximately 300,000 uninsured children — would gain health coverage if the ARPA health care subsidies are made permanent. Nearly two-thirds of these gains would be among families with children whose incomes are between 200% and 400% of the federal poverty level (FPL). These subsidies also have had a significant positive financial impact on families and children in rural communities, who often experience some of the highest insurance premium costs.
Although the Inflation Reduction Act does not make these ARPA subsidies permanent, extending them for three more years means that more families can access quality and affordable health care coverage throughout the ongoing public health crisis. In Colorado, the extension of these subsidies and overall health insurance coverage means that we will be able to expand affordable health coverage to more Coloradans who have been left out of health reform efforts, including undocumented Coloradans, as early as next year.
Although the legislation provides enormous health benefits to families, there is still significant work to be done in several critical areas for Coloradans. The law fails to invest in the early childhood sector, which remains underfunded and fragmented. The issues facing parents, children, and the early childhood workforce have only been exacerbated by the pandemic, and it is essential that we recognize the pressing need for legislators to address the nation’s highly inaccessible early childhood system. The legislation also missed the opportunity to close the Medicaid coverage gap in states that still have not taken up the Medicaid expansion under the ACA, extend 12-month postpartum coverage, continue the expanded child tax credit, or continue federal funding of universal school meals.
While we applaud legislators for expanding health insurance subsidies and working to address the high cost of prescription drugs, we call on our elected officials to continue centering the needs of children and families in Colorado. If you meet with your federal representatives this summer recess, please continue to highlight the needs of the children and families in your communities. This includes emphasizing the need to fund universal school meals and bravely reimagine our early childhood sector so that young children can have the high-quality early learning experiences they need to thrive.
Learn more about the Inflation Reduction Act on the Biden-Harris Administration’s website.