American Rescue Plan Helps People Afford Health Coverage

Update from Raising Women's Voices

The COVID-19 pandemic has made the existence of the ACA even more important, as millions of people have lost their jobs and/or their health coverage at exactly the time when affordable health care is critically important. The new Biden administration COVID relief plan, the American Rescue Plan Act (ARPA) is helping to make ACA health plans even more affordable – at least on a temporary basis. Health advocates hope such changes can be made permanent in the future.

Starting next week, April 1, much needed relief is coming to COVID-weary Americans who cannot afford to buy or keep their health coverage. Thanks to the ARPA, low- and middle-income people will get more financial assistance than ever in American history to buy high quality health plans on their own. An estimated 14.9 million uninsured people will now qualify for financial assistance to buy their own health plan through HealthCare.gov, according to the U.S. Department of Health and Human Services (HHS).

The ARPA COVID relief package will help people afford health coverage in three main ways. The first two improve the affordability of private ACA health plans sold through HealthCare.gov or state insurance marketplaces:

• More people are now eligible for more financial assistance through HealthCare.gov, primarily in the form of Advance Premium Tax Credits, a subsidy based on your income that lowers your monthly insurance payment or premium. This means that four out of five people will be able to find a health plan for $10 a month or less. The average person who buys a health plan through HealthCare.gov will pay $50 less per month. This assistance will be in place for two years.
• Anyone who qualifies for or collects unemployment payments in 2021 is automatically eligible for a health plan for little or no monthly premium from HealthCare.gov. Since this provision is more challenging logistically for the marketplace to implement, it will not be active until later this summer. However, you can shop for health plans now. This provision will be in place for one year.

The ARPA has an additional provision to help people who lost their jobs keep their employer-sponsored coverage. COBRA is the federal law that enables people to remain on a former employer’s health plan for 18 months, or longer in some states, by paying the premiums themselves. However, many people have found this option to be unaffordable. Now the federal government will pay 100% of the monthly premiums for six months (April - September 2021) for anyone who involuntarily lost their employer-based coverage and opts for COBRA. This relief, although temporary, makes COBRA a much more attractive short-term option.