- A reinstated Affordable Connectivity Program (ACP) could bring about a positive economic impact to healthcare and the workforce
- 37% of ACP recipients were also enrolled in Medicaid, according to a Brattle Group study
- There’s still no word on whether the federal government plans to restore ACP, but some states are undertaking their own affordable broadband efforts
We’re creeping closer to the one-year mark since the federal government axed the Affordable Connectivity Program (ACP) due to lack of funding, which left over 23 million low-income households without affordable internet.
But folks didn’t just lose the $30/month subsidy and a reliable broadband connection. A new study from the Brattle Group found healthcare and workforce opportunities – and the economic impact associated with both – are also down the drain without the ACP.
Should the program return, it can potentially save up to $29.5 billion in annual healthcare costs by improving access to telehealth, said the Brattle Group. The firm noted since ACP had a “modest annual cost” of $7.3 billion, the healthcare savings could “more than offset the costs of the entire program if it were reinstated.”
The linchpin in this idea lies in the overlap between ACP and Medicaid recipients, according to Brattle Group Principal Paroma Sanyal. She told Fierce around 37% of people who were enrolled in ACP also had Medicaid benefits. Data from the Universal Service Administrative Company (USAC) showed Medicaid eligibility accounted for a sizable chunk of ACP applicants.
Given that the federal government pays a fixed percentage of each state’s Medicaid costs, Sanyal said the ACP’s healthcare savings may be scorable by the Congressional Budget Office (CBO). Basically, the CBO is responsible for assigning a “score” (i.e., a price tag) on federal legislation.
The CBO scoring “only has to be from federal support and not state support,” she said. “So, we figured out how much was state supported…and then came up with [$6 billion] that could be scorable.”
Over 12 million telehealth visits will be lost per year due to the end of the ACP, the Brattle Group estimated, with 4.5 million of those belonging to overlap recipients of ACP and Medicaid.
To say the U.S. government is spending a lot on healthcare programs is an understatement. In 2023, it spent $1,029.8 billion and $871.7 billion on Medicare and Medicaid, respectively.
Telehealth can save costs not only for patients but health insurance companies as well, New Street Research Policy Analyst Blair Levin noted in a Senate hearing last May on “The Future of Broadband Affordability.”
“Given the amount the United States spends on Medicare and Medicaid, universal, sustainable broadband should be seen as a huge opportunity to improve health outcomes while lowering costs,” Levin wrote at the time.
The ACP’s expiration would raise the cost of government-provided healthcare services and “diminish health care outcomes,” Levin added.
The ACP and workforce
The number of remote workers shot up considerably ever since the Covid-19 pandemic forced most of the world online. The ACP’s return could bring about $2.1-$4.3 billion in annual wage gains from expanded labor force participation, said the Brattle Group.
ACP has particularly helped more women participate in the workforce, Sanyal said.
“Women who actually had access to the internet through the ACP, their labor market participation went up,” she explained. “There’s also a strand of literature in economics that shows when women’s workforce participation goes up – for various reasons – there’s an overall increase in wages.” That increase goes for both men and women.
A research paper published in August similarly found the increase in remote work opportunities has helped women find more entry-level jobs such as administration, customer service and online commerce.
But as of now, it’s unlikely the federal government would take this data into consideration regarding the ACP, as it’s trying to scrub diversity, equity and inclusion (DEI) initiatives from both the public and private sector.
All told, the Brattle Group’s findings are “striking but not surprising,” said Drew Garner, director of policy engagement at the Benton Institute for Broadband & Society. However, he noted Brattle’s conclusions were “somewhat conservative” as the firm only analyzed a subset of outcomes – health, education, employment – for a subset of the population (those who fully disconnected when they lost their ACP benefit).
“A full accounting of the ACP’s benefits would likely find much larger benefits,” Garner told Fierce.
Status of affordable broadband
The future of the ACP remains murky, with neither Congress nor the Federal Communications Commission making any moves to restore the program anytime soon. The Broadband Equity, Access and Deployment (BEAD) program is also at an impasse as new NTIA leadership has yet to publish updated guidelines.
In the meantime, states like New York and Massachusetts have stepped up to the table with legislation to make broadband more affordable for their low-income consumers – much to the dismay of telecom trade groups.
Can these state broadband plans generate an economic impact similar to that of the ACP? Sanyal said yes, but noted states should focus not just on mandating affordable internet but also device access.
The ACP offered enrollees a one-time $100 discount when buying a laptop or tablet from participating providers, a benefit that was “very important in crossing the hurdle” for a household to actually use its low-cost broadband plan.
Garner agreed such state legislature can bolster economic growth. “It is the connectivity, not the ACP’s $30, that generates economic benefits,” he concluded.
