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If you recently shopped for health insurance but found it unaffordable, you might want to give it another shot next month.
The $1.9 trillion coronavirus relief law President Joe Biden signed into law Thursday includes some of the most consequential changes to the Affordable Care Act seen in more than a decade. People who lost their jobs during the pandemic are getting help. So are those who’ve been uninsured for years or have been putting massive chunks of their earnings toward insurance.
The changes are meant to address long-standing affordability problems with the 2010 healthcare law. Although the Affordable Care Act expanded health insurance to 20 million people and helped keep insurance rates steady during the coronavirus pandemic, 29 million people are still without coverage. The vast majority of those uninsured people blame it on the high cost of insurance, the nonpartisan Kaiser Family Foundation found.
Now Congress is pouring billions of dollars into the ACA marketplace, Medicaid, and even health insurance that people gain from their employers.
“There are a lot of ways people will get coverage during the pandemic,” Cheryl Fish-Parcham, director of access initiatives at the consumer health advocacy group Families USA, told Insider.
Here’s how the stimulus — as well as Biden administration actions — are reducing the cost of health insurance.
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Help with premiums for more people
The Affordable Care Act allowed roughly 9.6 million people to sign up for private health insurance by helping them pay for their monthly premiums.
But millions of middle-income people were left out. That’s because the healthcare law as written ensured that most people making more than 400% of the poverty level — about $51,000 for one person — didn’t qualify for any financial help before the stimulus. That made coverage unaffordable for them.
Louise Norris, the co-owner of a health insurance brokerage firm in Colorado who also writes for healthinsurance.org and Verywell, said the scenario arose often. For instance, a 60-year-old in Rifle, Colorado, earning $52,000 this year would have to pay 20% of income for the cheapest plan available in the marketplace. Another couple from West Virginia faced the prospect of paying more than half its income for the cheapest-available plan.
Rather than pay such expensive premiums, many people chose plans that offer inadequate coverage or went without insurance.
The changes in the latest stimulus package are a game-changer. Starting April 1, people will pay no more than 8.5% of their incomes for premiums, and the federal government will pick up the rest of the tab.
“Eliminating the subsidy cliff would have a huge impact on older enrollees and people who live in areas where coverage is really expensive,” Norris said.
The left-leaning Center on Budget and Policy Priorities estimated that the stimulus would cause premiums to drop from $960 to $425 a month for a mid-level plan for a typical 60-year-old making $60,000 a year.
The law also gives more financial assistance to people with incomes below $51,000. For instance, a person making $30,000 would pay $85 rather than $195 per month in premiums, according to the CBPP analysis.
Some people wouldn’t have to pay premiums
Under the stimulus, the federal government picks up the tab for premiums for anyone making up to 150% of the federal poverty level, or $18,735 a year. For instance, a person making $18,000 would pay $0 rather than $54 a month, the CBPP analysis found.
The stimulus also picks up the full premium for people who are on unemployment insurance.
The changes to health insurance in the stimulus are temporary. The increase in ACA subsidies that begins April 1 only applies for the remainder of 2021 and 2022.
People still have to watch for out-of-pocket costs
Just because a health insurance plan has low premiums doesn’t mean people won’t get hit with a big bill when they seek medical care. The money people are responsible for paying outside of their premiums is called a deductible, and it’ll vary by plan.
A Kaiser Family Foundation analysis for 2020 found they ranged from $209 to $3,268 for the year for a mid-level plan. Insurance plans with the cheapest premiums carried an average of $6,506 deductibles. Preventive care — such as an annual wellness exam — is covered by insurance and won’t cost patients extra money.
“The deductible is an important thing for people to keep in mind,” Fish-Parcham said. The deductible is a liability the consumer would have before their insurance begins to pay for most services.”
Healthcare.gov is open
Biden signed an executive order in January to reopen Healthcare.gov, the health insurance marketplace where people can shop for government-subsidized coverage.
The enrollment period usually lasts six weeks in the fall. Without the federal government taking action, people otherwise can only sign up for coverage if they can prove they have experienced a major life change such as a job loss, divorce, or birth of a child.
Now Healthcare.gov is open for three months — from February 15 to May 15 — and people who already have health plans are allowed to change their policies if they see a better deal.
“People who found it unaffordable to buy insurance before may be surprised to find they are eligible for free or low-cost coverage,” Fish-Parcham told Insider.
As many as 9 million people who are uninsured now would qualify for subsidies even if it weren’t for the stimulus, a White House official told Insider.
“There are a huge number of people who are going to discover if they show up to shop right now that coverage is far, far more affordable than they’re expecting,” the official said. “Three out of four Healthcare.gov consumers today under current law subsidies can buy a plan for less than $50 a month.”
The official also said people won’t get dinged financially if they chose to sign up for coverage before the coronavirus stimulus passed. People will either get reimbursed when they file their taxes or they can update their insurance application now, the official said.
One thing to be aware of: The coverage you buy won’t start right away. It’ll kick in the first day of the following month that you sign up.
New protections from big bills at tax time
The stimulus protects people from potential health insurance-related penalties when tax season rolls around. When people sign up for coverage on Healthcare.gov they have to try to predict how much they’ll make to see what subsidies they can get.
Under-estimating income can result in people paying back to the IRS thousands of dollars in subsidies during tax season. The stimulus exempts people from these repayments.
Jodi Ray, executive director of Florida Covering Kids & Families, said projecting income is especially hard during the pandemic with job closures and starting dates getting pushed back. Ray oversees a navigator program that helps people shop for coverage. It’s based at the University of South Florida but helps consumers all over the state.
“When you’re projecting your income for 2021 you have no idea what’s going to happen,” Ray said. “It’s like a guessing game.”
An alternative for people who lose their jobs
The stimulus lets laid-off workers get help paying for the health insurance they got through work.
Typically laid-off workers who lose their employer-provided insurance have the option of signing up for COBRA, an expensive plan that requires the individual to pay their own premiums with no help.
Average annual premiums for health insurance people get at their jobs cost $7,500 for an individual and $21,500 for families, according to the Kaiser Family Foundation.
Under the stimulus, the government is picking up the tab for 100% of people’s premiums through September 21. Though people will have the option of signing up for ACA plans, staying on COBRA helps people ensure they can see their same doctors.
Plus, people who choose this option may already have started to pay down a deductible. Every time people switch health plans the deductible starts all over again.
Under the stimulus, the federal government gives states more money to pay for Medicaid over the next two years, opening up the possibility that millions more low-income people could get government insurance.
All states were supposed to expand Medicaid to cover low-income individuals who make less than $17,774 under the Affordable Care Act. A Supreme Court decision made that provision optional, however, and so now 12 states, including Texas and Florida, still haven’t moved to expand the program, leaving people in poverty with no option for health insurance.
Democrats are hoping to entice the holdout states to expand their coverage by offering them more money if they do. The Kaiser Family Foundation has estimated that 4 million people would enroll if all states were to expand Medicaid.
Ray said she has in recent months noticed a deeply ironic trend: People who work in the performing arts have been moving from New York and California to the Sunshine State because it has a lower cost of living — but it doesn’t offer the same Medicaid coverage they had in those other states.
“It really puts people in some very challenging situations,” Ray said. “I am having to be the person that’s going to say, ‘I’m sorry this is the cost of plans. I know they’re unaffordable but these are your options.'”
But navigators can still be a help. Some Florida counties have coverage options that are similar to Medicaid, and Ray also tells people where they can access healthcare services for free.
What the stimulus doesn’t do
The stimulus sidestepped promises that Biden made when he ran for office that would cut into healthcare industry profits.
The bill doesn’t give people the option to sign up for a new government plan similar to Medicare, nor does it lower the age of Medicare eligibility. Biden said when he ran for the White House that people should be allowed to sign up for Medicare at age 60. Right now people are allowed on at age 65.
Democrats in Congress aren’t united behind either of these approaches. They also know the healthcare industry celebrated the changes they made but would aggressively fight them on expanding government insurance.
The healthcare industry would also support making the increased Obamacare subsidies permanent. Biden proposed doing so when he was campaigning.
“I’m hoping that this might be the start of a permanent fix,” Norris said. “But even if it isn’t, people should still take advantage of it while it lasts.”
This story initially ran February 11 and has been updated to reflect the latest news.
This content was originally published here.