By Brittany Anderson
More savings and lower cost health insurance coverage plans may be possible because of a bill passed in March 2021.
Under the American Rescue Plan Act of 2021, more people than ever qualify for help in paying for health coverage. Most people currently enrolled in a Health Insurance Marketplace plan may qualify for more tax credits, and lower health insurance premiums after these new savings.
While anyone can buy health insurance through other sources, the only way to get a premium tax credit is through the Marketplace.
According to healthcare.gov, the amount of a premium tax credit depends on an individual’s estimated 2022 household income entered on the Marketplace application. If the income changes or the insured adds or loses members of the household, the premium tax credit is likely to change. Those applying through the Marketplace can choose to apply some or all of this tax credit to the monthly insurance premium payment.
Ron Nemetz, insurance broker and owner of Nemetz Insurance Services in Buda, said that people who made more than 400% of FPL (federal poverty level) — $69,680 per year — were previously not eligible for any subsidy.
Now, for example, Nemetz said a family of two 62-year-olds living in Hays County would be eligible for more than $1,000 per month of assistance in paying for a plan, even with a joint annual income of $160,000.
While they previously would have paid $1,650 a month for the cheapest plan through healthcare.gov, under the new law, the government will subsidize the family $1,600, leaving them with a payment of only $50.
“In the last several years, people have done alternative plans that aren’t ACA (Affordable Care Act) qualified, or don’t cover pre-existing conditions, to keep costs down,” Nemetz said. “They may not even be aware of these new tax credits that are available.”
The change to the credits allowed in the ACA came about because of the American Rescue Plan which was passed by the U.S. House on March 10 by a vote of 220-211. One Democrat voted against the plan with all Republicans. President Joseph Biden signed that law March 11, 2021, which made the health insurance plans more affordable through the Marketplace due to the tax credits allowed under the American Rescue Plan.
Nemetz said he advises people who did not get a tax credit in the past should recheck if they are eligible under the Affordable Care Act.
“I would encourage anyone who has looked at alternative options like Christian Healthcare Ministry plans, indemnity plans or short-term plans to lower costs for the ACA market because they didn’t qualify for a credit before, to see if things have changed for their circumstances,” Nemetz said.
Anyone wanting to check if they qualify for the new tax credits can check their income range at www.healthcare.gov/lower-costs, or can contact a broker like Nemetz to see what options are available.
Additionally, Texas’ Open Enrollment — the yearly period where people can enroll in a health insurance plan for the next calendar year — will be available through Jan. 15 for coverage that will begin Feb. 1.
Outside of the Open Enrollment Period, those seeking healthcare insurance can enroll in a plan if they qualify for a Special Enrollment Period; eligibility for this includes certain life events such as getting married, having a baby or losing other health coverage.
