Health insurance for individuals and families is extra affordable for this year and next, thanks to the recent passage of the American Rescue Plan Act (ARPA).
For 2021 and 2022, the new law significantly increases premium subsidies for most taxpayers. These subsidies, in turn, reduce the out-of-pocket premiums for ACA-compliant health care plans, in some cases to zero.
Depending on your income, you may be newly eligible for better, more comprehensive health insurance with no out-of-pocket premium and lower deductibles than last year.
If you make less than 150% of the federal poverty line, the American Rescue Plan allows you to buy silver ACA plans for zero premium, and significantly reduced deductibles.
The plan also benefits those who earn more than 400% of the federal poverty line. Prior to the ARPA, these families received no subsidy and had to pay all the premiums out of pocket. But they now effectively pay ACA insurance premiums for the benchmark plans at 8.5% of income.
According to the Department of Health and Human Services:
- A family of four with a household income of $90,000 qualifies to have their premiums lowered by up to $24,000 per year.
- Uninsured childless couples with annual incomes over $70,000 could see premium savings of over $1,000 per month.
- Unmarried individuals earning $19,000 per year qualify for health insurance coverage with no premiums due after the tax credit. This will generate savings of about $66 per month.
- People earning up to 150% of the federal poverty line can now get silver plans for zero premium with vastly reduced deductibles.
- The ARPA effectively lowers monthly premiums for new enrollees by over 25%, from an average of $117 per month before the bill’s February passage down to $86 by April of this year.
Competition Driving Down Costs
Taxpayers are also benefiting from increased competition as more carriers are entering the ACA marketplace. Insurance premiums have fallen for the third year in a row, slipping by 1.7% in 2021.
According to a recent study, average ACA premiums have fallen in 43 states in 2021. Only one state, North Dakota, has seen a premium increase of more than 6%.
Outlook
The ACA premium reductions under the ARPA are set to expire at the end of 2022. But in the meantime, lower- and middle-income Americans with individual and family health insurance may have an opportunity to save significant amounts of money, purchase better health insurance coverage, or both.
But don’t try to go it alone. Health insurance is complex.
We can help you get the most value and protection possible. It costs nothing to get advice from a qualified health insurance professional. But don’t delay: The ACA special open enrollment period ends Aug. 15. Call us today for a no-obligation consultation.
Catherine oversees UBF's daily operations and client retention strategy. She has a background in mathematics, economics, and human resources. In her spare time, she enjoys spending time with her family, taking the dog on long walks, and caring for a small and unfruitful garden.