Health insurance just got a lot more affordable
This is a big deal. The American Rescue Plan (ARP) recently signed into law will help make healthcare coverage more affordable — or even free — for many people. If you’ve looked at federal marketplace plans in the past but thought they were too expensive, it is time to look again. If you already have coverage, you should check for new options, including full-coverage policies at a more affordable level. The ARP greatly expands eligibility for premium subsidies for people enrolled in federal marketplace health plans under the Affordable Care Act (sometimes referred to as Obamacare).
The new changes provide millions of people the opportunity to sign up for coverage by August 15, 2021 and will lower prices for those who are already on a marketplace plan. Here are some of the new changes:
- ZERO premiums for low-income individuals
Under the new law, people with incomes up to 150% of the federal poverty level ($19,320 for a single individual, $39,750 for a family of four) can now get “Silver” plans with zero monthly premiums and vastly reduced deductibles. Previously, no matter how low their income, people had to contribute something toward the cost of the benchmark Silver plan.
- Zero-premium plans for those who received unemployment this year
Under the new law, people who received unemployment benefits at any time in 2021 will be eligible for a zero-premium Silver plan with comprehensive cost-sharing subsidies for the rest of 2021.
- Increased assistance for people at higher income levels
Premium tax credits in the marketplace will increase for people at every income level, and the premium savings now available are substantial. Individuals who make under $25,760 will have to contribute just $43/month. Individuals making $51,000+ were previously not eligible for premium subsidies. Now, there will be a cap, so you don’t have to contribute more than 8.5% of your household income toward the benchmark plan.
- Potential tax savings
Previously, if an individual underestimated their income for the year, there was a reconciliation process at tax time where people might have to pay back some or all of their insurance premium subsidy. Because many people had varying and unpredictable incomes during COVID-19, the new law eliminates this required “pay back” for tax year 2020.
The premium subsidy enhancements in the new law are effective during 2021 and 2022 (except for the unemployment insurance category, which is only 2021). Subsidies for current enrollees are retroactive to the beginning of this calendar year, so if you’ve already paid higher rates, they can be claimed as tax refunds when you file your tax return next year.
Worth noting: if you switch plans, a new deductible would take effect and any spending toward your deductible this year would not count toward the new deductible.
CrescentCare has a long history of serving people in the service and hospitality sector in New Orleans and this new law will substantially help many of these individuals who do not have health insurance and could not previously afford it. For many artists, musicians, and other gig workers, this could finally be a way to get health insurance coverage. Many people make a little too much money to qualify for Medicaid and this offers a new way to get affordable (or free) coverage with zero premium. We think this can be a game changer for those in the gig economy. So, if you don’t have health insurance or want to get a lower cost plan on the marketplace and save money now, check out healthcare.gov or get help comparing plans by calling Community Health Assistance at 225-478-1572.
Megan Coleman-Watkin is a Licensed Clinical Social Worker who has served in various capacities at CrescentCare since 2011. Her areas of specialty include public and private benefits, housing, financial inclusion and employment services, and health access programming for people living with HIV.
CrescentCare is a nonprofit federally qualified health center that serves approximately 13,000 patients a year at its two New Orleans clinics at 1631 Elysian Fields Avenue and 3308 Tulane Avenue. CrescentCare is open to everyone regardless of insurance status and is committed to serving the healthcare needs of the community.