29 Apr Health Insurance: Higher Tax Credits and Lower Premiums
The American Rescue Plan is Lowering Costs
For those who purchase health insurance through Healthcare.gov, the federal exchange published new premiums and subsidy amounts on April 1st. ARP adjusted the premium tax credit (which translates to higher premiums) for 2021 and 2022. The amount that households will pay for health insurance on the exchange is also limited to a maximum of 8.5% of their annual income. This means even higher-income households – those with income up to 400% above the federal poverty amount – can qualify for the subsidy. As Healthinsurance.org points out, while that income level sounds substantial, depending on location, such a household may be paying up to 50% of its annual income in health insurance.
Additionally, people at the lower end of healthcare.gov, who purchased a Bronze plan because it fit their budget, may find that they qualify for a benchmark Silver plan at the same cost or even free. Those plans provide much more robust benefits than Bronze plans.
In a one-time provision, policy-holders who received excess premium subsidies on their health insurance in 2020 will not be required to repay their advanced premium tax credit. Taxpayers who already submitted their 2020 tax forms and paid the tax owed on the subsidies will receive a refund automatically. (Check out Healthinsurance.org’s article on excess premium subsidies.)
Those receiving at least one week of pandemic unemployment benefits in 2021 could be eligible for a Silver plan with $0 premiums. (According to the Centers for Medicare and Medicaid Services, the rollout of extra tax credits for the unemployed will occur over the summer.) Additionally, people who have lost or are about to lose their jobs and are covered by COBRA will have their premium costs covered by the government through September 30, 2021.
Healthcare.gov is encouraging people to log in to their accounts and update their accounts to see if they qualify for increased tax credits to lower their premiums. Those who are not covered through the federal or a state exchange should investigate to see if they could be eligible for a better on-exchange plan at substantial savings.
While savings via tax credits may be substantial, figuring out how to maximize your health insurance savings and retain a quality plan can be daunting. Guild members are encouraged to contact our representatives at LIG. They’ll provide concierge service to help you figure out if you are on the best plan for your needs and to advise you free of commitment or cost if you are not.
State Marketplace Responses
State marketplaces have also rolled out their plans to pass on savings from the ARP to their consumers. Some of the provisions are listed below. Check out each state exchange for full deal:
- California: Individuals earning $32,000 and under per year can get a Silver benchmark plan for $50-$60/month. Bronze plans are available for $1/month. Qualifying households will also see their premiums lowered by an average of $119/month.
- Colorado: The state estimates that residents purchasing insurance through the state exchange will see substantial savings, with 75% of applicants possibly qualifying for a $25 premium on the lowest cost plan available. Individuals who received at least one week of unemployment benefits in 2021 may qualify for free or low-cost health insurance options.
- Connecticut: Starting May 1, the state is opening a Special Enrollment Period for uninsured, under-insured, and residents seeking financial assistance. Those who received unemployment benefits in 2021 may qualify for a free or low-cost Silver benchmark plan. Residents purchasing through the exchange can update their applications and financial data through August 15.
- District of Columbia: Since April, DC Helplink has automatically recalculated the monthly premium amounts for qualifying applicants already receiving insurance through that exchange. New applicants can apply through their Special Enrollment Period. Those who received unemployment benefit may qualify for a $2 monthly premium.
- Idaho: The deadline to enroll in health insurance without a qualifying life event, or to apply for increased tax credits, was April 30th. Only those with a qualifying life event, such as losing their health insurance or having a baby.
- Maryland: Starting May 1, the state is automatically recalculating the tax credits and premium amounts for enrollees who checked maximum financial assistance on their accounts. Individuals can also log into their accounts to see their savings. Those who received one week or more unemployment insurance in 2021 can qualify for free or low-cost insurance. Uninsured individuals can also apply for health insurance.
- Massachusetts: The state is meeting the premium gap for the benchmark healthcare plan Advance Premium Tax Subsidies, ensuring that households will not pay more than 8.5% of their annual income. The subsidy amount is automatically calculated for those who applied for financial assistance. Those who did not apply for financial assistance will need to reapply to see if they qualify. Those without insurance can apply through July 23. Those receiving unemployment benefits may qualify for low- or no-cost health insurance.
- Minnesota: Starting April 6, residents who qualified for financial assistance can compare health plans to see what their expanded savings will be under ARP. Those who are uninsured or are not on the state exchange can apply through July 16.
- Nevada: Starting April 20, Nevada Health Link implemented ARP subsidies and assistance for the unemployed. Nevadans can log into their accounts to apply for subsidy increases. Starting in June, the exchange will automatically assess the financial eligibility for those who previously applied but didn’t qualify for assistance.
- New Jersey: Beginning May 1st, the state is offering households with higher incomes financial help, so that premiums are capped at 8.5% of their annual income. Those receiving unemployment insurance can apply for no- and low-cost plans.
- New York: On April 5, the state sent notices to the state exchange consumers informing them of the amount of tax credit subsidy they would receive and what steps they need to take. The credits are available to low- to moderate-income households now, and to high-income households starting June 1.
- Pennsylvania: Pennie, the state exchange, is permitting residents to shop for healthcare through August 15. Enrollees who qualified for financial assistance may see additional savings under ARP, and those who did not qualify may now. Pennie is applying the changes to enrollees’ accounts, and encourages consumers to check back periodically.
- Rhode Island: Starting April 1st, most state exchange enrollees have been seeing a lower monthly bill. Over the summer, the state will be making financial assistance available to those who didn’t qualify. Those who received unemployment benefits in 2021 may qualify for low- or no-cost premiums.
- Vermont: Starting this summer, consumers on the Vermont Health Connect state exchange will be receiving premium tax credits. Residents without insurance can apply through August 16, and those getting insurance directly through Blue Cross and Blue Shield or MVP Health Care can transfer their existing plan. Those who received unemployment in 2021 should call for extra financial assistance.
- Washington: Beginning May 6, Washington Healthcareplanfinder is increasing the tax credits for consumers, and extending those to higher-income households who didn’t qualify earlier. Those paying over 8.5% of their household income can apply for financial assistance for the first time.
The enrollment period on the federal exchange has been lengthened to August 15th. States running their own exchanges have extended their deadlines to match or go beyond the federal exchange and have opened enrollment on a state-by-state basis. (We’ve updated our article on the health insurance marketplace reopening to reflect these changes.)