Episode Summary
The American Rescue Plan Act recently signed into law contains major expansions of Affordable Care Act (ACA) subsidies that will significantly lower healthcare costs for millions of Americans.
This new COVID relief law aims to increase access to affordable health coverage by expanding eligibility for premium tax credits and cost-sharing reductions. It builds upon the ACA by making subsidies more generous and available to more people.
One major provision is enhancing tax credits to lower premiums for current ACA enrollees. Many who are currently insured through the marketplaces will see their premiums reduced by $50 or more per month. But to receive the increased tax credits, current enrollees must update their healthcare.gov application before April 1, 2021. The increased subsidies are retroactive to the beginning of 2021, so updating promptly ensures you maximize savings and receive any refunds for overpayment this year.
The Act also makes subsidies newly available to upper-middle-class Americans who were previously ineligible. It caps the maximum premium contribution at 8.5% of household income. This will provide relief for many middle-class families who previously had to pay full market rate premiums.
For those who recently lost jobs or had their hours reduced, the Act stipulates that their marketplace application can count their income as 133% of the federal poverty level. This provision aims to provide very low or even zero premium coverage options for those relying on unemployment insurance.
The Act also incentivizes marketplace enrollees with incomes between 100-150% of the federal poverty level to switch to silver plans. Those in this income range will be able to get the highest subsidies and lowest out-of-pocket costs with a silver marketplace plan. So enrollees using bronze, gold, or platinum plans should check to see if moving to a silver plan provides greater savings.
In addition to expanding marketplace subsidies, the new law provides 100% COBRA premium assistance from April 1 to September 30, 2021, for eligible individuals. Those who lost workplace coverage due to involuntary job loss or reduction in hours can take advantage of this temporary COBRA subsidy.
Experts estimate the American Rescue Plan makes at least 2 million uninsured people newly eligible for ACA subsidies. It also benefits many who were already eligible but found coverage unaffordable. This presents a major opportunity for insurance agents and brokers to prospect newly eligible people during the special enrollment period.
In summary, the American Rescue Plan makes substantial improvements in healthcare affordability through more generous and widely available ACA subsidies. Current enrollees must take action quickly to receive the new benefits. And many uninsured Americans may find health coverage within reach for the first time. Make sure you understand how the new law can help reduce your healthcare costs.
Timestamps
(0:00:03) - Mike Smith: The American Rescue Plan Act presents unique opportunities for new enrollments
(0:03:59) - American Rescue Plan Act includes a first major expansion of the Affordable Care Act since 2010
(0:11:41) - The Congressional Budget Office estimates subsidies will help 2 million currently uninsured people
(0:19:04) - The Affordable Care Act's Affordable Premium Assistance Act kicks in on April 1
(0:26:35) - I want to talk a little bit here about how this might impact the group health insurance market
(0:28:15) - ARPA covers 100% of CoBRA cost for people who lose employer coverage
(0:30:00) - The federal government will have to produce new model notices for Cobra in 2021
(0:32:06) - Extra tax credits will be available starting this summer for unemployed clients
(0:35:18) - Getting the new eligibility letter starts with getting the new brokerage
(0:36:15) - If a current ACA client changes plans, will the carrier give credit
(0:37:42) - You can still get quotes at healthcare gov and Health Sherpa
(0:41:18) - 3.6 million people are newly eligible for health care coverage savings
