There’s Still Time to Buy Health Coverage – And It May Be More Affordable

If you are considering purchasing health coverage (perhaps using your $1400 stimulus payment) but haven’t yet, you still have time. In addition, that coverage might be less expensive.

The 2021 Affordable Care Act (ACA) open enrollment period to buy health coverage on the health insurance marketplace (also known as the exchanges) ended December 15, 2020. Due to the COVID-19 emergency, President Biden has reopened enrollment through August 15, 2021.

For many Americans, coverage purchased on the marketplace has also become more affordable. The American Rescue Plan Act of 2021 (ARPA), recently signed into law by the President, increases and expands eligibility for premium subsidies for people enrolled in marketplace health plans. See LR’ s What You Need to Know Now postings here and here discussing ARPA’s COBRA subsidy and financial assistance to troubled multiemployer plans.

Marketplace premium subsidies reduce the cost of purchasing health insurance. Previously, those subsidies were partial and people, no matter how poor, had to contribute something toward the cost of the benchmark “silver” plan. ARPA fully subsidizes health coverage for individuals earning up to 150% of the federal poverty level (“FPL”) and individuals who earn up to $19,320 a year will have zero premium.

ARPA also increases premium subsidies for individuals at higher income levels up to 400% of the FPL ($51,040 for a single person). For example, individuals with incomes of 200% of the FPL ($25,760 for a single person) had been required to contribute $1,664 toward the cost of the benchmark marketplace plan in 2021. ARPA reduced that amount to $510. Individuals with an income of up to 400% of the FPL had been required to contribute up to $5,017 toward the 2021 benchmark plan premium. Now, with ARPA, that contribution is reduced by $679 to $4,338.

Under ARPA, individuals with income above 400% of the FPL are eligible for premium assistance for the first time. Now, they will be required to contribute no more than 8.5% of household income toward the benchmark plan. This may encourage more people to purchase coverage through the marketplace since it may be more affordable and more comprehensive than coverage purchased elsewhere.

The ARPA premium subsidy enhancements are temporary and effective during 2021 and 2022 only. To qualify for the new benefits, people need to sign up for plans at www.healthcare.gov or a state exchange website (in New York or New Jersey).