On March 11, 2021, Pres. Biden signed into law the American Rescue Plan Act (ARPA), a landmark $1.9 trillion COVID-19 relief package for Americans. The American Rescue Plan provides significant relief for Americans struggling through the COVID-19 pandemic. Some of the most critical provisions included in the relief package aim at making health insurance more affordable, accessible, and available for individuals and families across the country during the pandemic.
Affordable, comprehensive health coverage is always important, but as the COVID-19 pandemic has demonstrated, it is essential to promoting public health and protecting individuals and families from expensive healthcare costs. Because of this, the Biden-Harris administration has opened a Special Enrollment Period (SEP) for the health insurance marketplace (healthcare.gov). This SEP opened on February 15th and will run through the recently extended date of August 15th. This SEP also allows people to access the healthcare relief that was included in the ARPA, which targets improving affordability for health coverage options through the health marketplace in a number of ways.
Beginning April 1, ARPA is increasing subsidies for marketplace insurance plans that will directly benefit an estimated 122,600 Kentuckians. This eliminates or vastly reduces monthly premiums for people with low to moderate incomes. People with income below 150% FPL (about $19,000 for an individual and $39,000 for a family of four) would qualify for $0 monthly premium cost for a benchmark plan.
ARPA also provides new premium help for people with higher incomes who have previously been ineligible for subsidies in the marketplace. This will be especially helpful for people with incomes above 300% FPL ($38,280 for an individual and $78,800 for a family of four) who previously received little or no premium assistance and often faced unaffordable monthly premiums.
Additionally, ARPA opens a brand new opportunity for people with incomes above 400% FPL ($51,040 for an individual and $104,800 for a family of four) to become eligible for premium subsidies and instead sets a premium cap of 8.5% of annual income. This means that Kentuckians with higher incomes and older Kentuckians who are not yet eligible for Medicare could see significant savings with these increased marketplace subsidies.
- Family of four making $75,000 annually would be eligible to receive an estimated $1,453 per month in premium subsidies, reducing the cost of a silver plan from $1793 per month down to just $341 per month.
- 60-year old individual with no dependents making $40,000 annually would be eligible to receive approximately $140 a month in premium subsidies, reducing the cost of a silver plan from $352 per month down to $211 per month.
- 60-year old married couple making $65,000 annually with no dependents would be eligible to receive approximately $1512 a month in premium subsidies, reducing the cost of a silver plan from $1942 per month down to $430 per month.
Approximately 35,500 Kentuckians are newly eligible for premium subsidies, 7,100 Kentuckians are eligible for a $0 premium marketplace benchmark plan, and more than 80,000 Kentuckians already enrolled in marketplace coverage could see increased subsidies which lower their monthly premium.
ARPA also opens up one of the biggest opportunities to access affordable healthcare in 2021 for people who have lost jobs or employer-sponsored insurance. Kentuckians who receive unemployment insurance for at least one week in 2021 are eligible to receive the maximum amount of premium subsidies and cost-sharing reductions for the entire 2021 year, regardless of any income changes later in the year. This makes the benchmark silver plan $0 monthly for people receiving unemployment benefits in 2021. While this benefit will not be available on healthcare.gov until Summer 2021, this creates an incredible new opportunity for many Kentuckians receiving unemployment insurance to enroll in affordable, comprehensive health coverage.
For people eligible for COBRA as a result of involuntary termination or reduction in hours, ARPA provides additional relief in the form of a premium subsidy covering 100% of the premium cost between April 1 – September 30, 2021. ARPA also opens up the opportunity to enroll in COBRA even for people who already missed their enrollment period, but remain eligible for COBRA coverage. Individuals who previously enrolled in COBRA, but dropped the coverage for any reason are also able to take advantage of this new premium subsidy.
A couple of other provisions included in the American Rescue Plan add protections and assistance for 2020 marketplace enrollees. ARPA provides repayment forgiveness for APTC (advanced premium tax credits) or premium subsidies. Any Kentuckians who owed back some or all of their premium tax credits for 2020 will not have to repay the premium tax credit. This will be extremely beneficial to those with fluctuating incomes. Moreover, people who received a smaller tax credit than they were eligible for in 2020 will still get money back when they file their taxes. Additionally, because any taxpayer who received unemployment benefits in 2020 can disregard the first $10,200 of unemployment income from their taxable income, marketplace enrollees can further lower their income for the purposes of the calculation of the premium tax credit.
All of these provisions from the American Rescue Plan Act focus on increasing access to health insurance and decreasing costs for average people to make it easier and more affordable to get covered. For more information about accessing these benefits, check out healthcare.gov or use the find a kynector tool to get local help.
Kentuckians already enrolled in a marketplace plan, make sure to go back and update your application to see the new increased subsidies applied to your monthly premium. With the new provisions of the American Rescue Plan, four out of five enrollees will be able to find a plan for $10 or less per month after premium tax credits and over 50% will be able to enroll in a Silver plan for $10 or less per month!
To learn more about the author, visit: https://kyvoicesforhealth.org/our-team/.