Edit: The Senate passed HR1319 on 6 March, and the House passed the bill again on 10 March. President Biden signed it into law on March 11. CMS published some preliminary information For Marketplace Enrollment on March 12th.
Last weekend, the House of Representatives passed American Rescue Plan Act 2021 (HR 1319), an economic stimulus package designed to provide relief from the impact of COVID-19 on Americans. support the bill Most American – including those registered as Republicans and independents.
HR 1319 is now under consideration in the Senate, so we do not yet know what will be included in the final legislation. But the health insurance provisions in the House version of the law passed to the House Ways and Means Committee remain unchanged. initially proposed, and have so far not been a sticking point for the bill.
Many of the provisions in HR 1319 are designed to make health coverage more accessible and affordable. Today we’re taking a look at how the law will change the ACA’s premium subsidy structure for 2021 and 2022, and its impact on the premiums that Americans pay for individual and family health coverage.
Support for 12 million marketplace enrollments, plus who will make new enrollments
if you are one of them 12 million people For those who buy ACA-compliant coverage in the health insurance markets, your coverage is likely to be more affordable under HR 1319.
what else, Congressional Budget Office Estimates That an additional 1.7 million people – most of whom are currently uninsured – will enroll in health plans through the Marketplace in 2022 as a result of increased premium subsidies.
No one shall pay more than 8.5 percent of his income for the benchmark scheme
Some opponents of the law have criticized its premium subsidy increase: A Handout for Wealthy Americans. But that’s only because the law is designed to address subsidized rock – which may result in some households paying half of your annual income For health insurance premium. This is a situation that is clearly neither realistic nor sustainable for policyholders.
The Affordable Care Act (ACA) only provides premium tax credit (aka premium subsidy) if a family ACA-Specific Modified Adjusted Gross Income does not exceed 400 percent federal poverty level. For 2021 coverage in the continental US, this is approximately $51,000 for an individual and $104,800 for a family of four. Depending on where you live, this can be a comfortable income – but not if you have to spend 20, 30, 40 or even 50 percent of that income on health insurance.
The adjustment of HR 1319 to the premium tax credit guidelines will temporarily eliminate the income limit for premium subsidies — both for this year and next year. This means that – regardless of income – no one will have to pay more than 8.5 percent of their household income. benchmark plan (Second lowest cost Silver plan available on the exchange in a given region).
Under this approach, subsidies will be gradually phased out as income increases. If the full cost of the benchmark scheme does not exceed 8.5 per cent of the family income, then the plan buyer will not be eligible for the subsidy. But in some areas of the country – and especially for older applicants, who may be charged up to three times the premiums paid by young adults – premium subsidy eligibility can exceed 400 percent of the poverty level.
In addition to addressing the subsidy problem, HR 1319 also extends premium subsidy for marketplace buyers who are already eligible for the subsidy. Subsidies will be larger across the board, making post-subsidy premiums more affordable for most enrollees. At every income level, the law will decrease Percentage of income that people are expected to pay for the benchmark plan, which will result in huge subsidy.
Big subsidy? Here are a few examples.
how big? This will depend on location, income and age. Let’s look at some examples.
We will consider applicants with different income levels and ages in three locations: Albuquerque, New Mexico – where premiums are among the lowest in the country; Jackson, Mississippi – where premiums are close to the national average; and Cheyenne, Wyoming – where premiums are among the highest in the country.
In each location, we’ll look at how things will be for a 25-year-old, a 60-year-old, and a family of four (45-year-old parents, and 13- and 10-year-olds), all at different income levels.
you can see Full comparison in this spreadsheet. (The current premiums were received through HealthCare.gov’s browsing tool. The premium under HR 1319 was calculated using the proposed applicable percentage table Section 9661(a) And this The methodology is mentioned here, which will remain unchanged under the new law.)
In most cases, you will notice that the subsidy amount is larger under HR 1319, resulting in a lower benchmark premium and a lower price for the lowest cost plan available to that applicant (or more plans available at no premium). This is because the new law specifically lowers the percentage of income that people have to pay for the benchmark scheme. This, in turn, increases the subsidy amount required to reduce the benchmark premium. And since the premium subsidy can be applied to any metal-level plan, it also results in lower costs for other available plans (or more premium-free plans depending on the circumstances).
As you consider these numbers, note that if the current subsidy amount is $0, either the benchmark plan already considered affordable for that person, or their income exceeds 400 percent of the poverty level and subsidies are not available. If the subsidy amount is $0 under the HR 1319 scenario, it means that the benchmark plan will cost no more than 8.5 percent of the applicant’s income.
As you can see, additional subsidies will be widely available, but will be more significant for those who are currently paying the highest premiums. Under current rules, it may not be realistic for our Wyoming family to pay more than $30,000 in annual premiums (enrolling in a benchmark plan, with premiums exceeding $2,500 per month). The American Rescue Plan Act would reduce their annual premium for the benchmark plan by $10,000, which is pretty much manageable.
However, the law is not a cheap gift for wealthy Americans. Even if that family earned $500,000, they would still not receive the premium subsidy under HR 1319, because even at $2,528/month, the full-price cost of the benchmark plan would be only 6 percent of their income. different Treatment And this Tax breaks for employer-sponsored health insuranceFinancial assistance with individual market health insurance will not be offered to the wealthiest applicants.
By limiting premiums to 8.5 percent of income, HR 1319 provides targeted premium assistance only where it is needed. And by increasing the existing premium subsidies, the law makes it easier to afford health coverage for people at all income levels.
Premium enhancements will be retroactive but also temporary
Assuming that these premium subsidy enhancements are approved by the Senate, they will be retroactive to early 2021. Existing nominees will be able to start claiming any applicable additional subsidy immediately, or they can Wait and Claim It on Your 2021 Tax Return. Additional premium subsidies will also be available for 2022, but will no longer be available until 2023 unless additional legislation is enacted to increase them.
And there’s currently a special enrollment period – which Continues till August 15 in most states – during which people can sign up for coverage if they haven’t already. In most states, this window can also be used by people who already have coverage and want to change their plan, so this is definitely a good time to reconsider your health insurance coverage and make sure that you are taking advantage of the benefits available. From you
Lewis Norris there is one personal health insurance Broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinion and educational articles about Affordable Care Act for healthinsurance.org. his state health exchange update It is regularly cited by the media that is covered by health reform and other health insurance experts.
Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of knews.uk and knews.uk does not assume any responsibility or liability for the same.