Under the COVID-19 relief package that will become law this week, many Americans will be eligible for larger federal subsidies on health plans purchased under the Affordable Care Act (ACA). This applies to people who buy their own insurance through the Obamacare marketplace.

For many Americans, this means a large reduction in health care premiums, which will make health insurance more affordable. (A premium is required monthly payment to your health insurance company to maintain and receive coverage and insurance benefits.)

This is especially important for patients with autoimmune conditions or chronic diseases who often face high medical costs and require insurance to access treatment and care to keep their condition stable.

How Do These Subsidies Work?

The ACA, also known as Obamacare, was enacted about a decade ago as a comprehensive health care reform law.

The new COVID relief law temporarily (for two years) expands insurance marketplace subsidies to above 400 percent of poverty and also increase subsidies for those making between 100 percent and 400 percent of the poverty level, which is consistent with what President Biden proposed during his presidential campaign.

These additional subsidies could yield substantially lower premium payments for the vast majority of the nearly 15 million uninsured people who are eligible to buy on the marketplace and the nearly 14 million people currently insured on the individual market. Most of these 29 million people could see lower health insurance premiums as a result of these subsidies, and many could also afford lower deductible plans.

“What this law will do is make it so the majority of uninsured citizens are eligible for free or low-cost coverage,” Cynthia Cox, a Vice President at Kaiser Family Foundation told the New York Times. “This won’t bring us to universal health care, but it will bring us closer to universal eligibility for subsidized health insurance — for two years.”

These tax credits vary, based on age, location, and income level. As the Times reported, “these changes mean small adjustments for some Americans and very substantial ones for others”:

  • For someone earning around $19,000, the subsidies would be enough to allow them to get a typical plan with no monthly payment.
  • For someone earning more than $51,000, the subsidies could lower premiums by $1,000 a month in the most expensive markets.

The law eliminates the income cap, which makes more people eligible for a reduced health insurance premium, the amount you pay per month for the plan.

This bill is a lifeline for those who have fallen through the cracks because they just miss the eligibility requirements for the ACA.

Who Is Not Included?

The subsidies do not apply to undocumented immigrants and poor Americans whose states have not expanded Medicaid with an option under the ACA.

The subsidies do not apply to people who get insurance through their employer or to Medicare.

How to Sign Up

The Biden Administration has kept the federal ACA marketplace are open for a special COVID-19 enrollment period through May 15, 2021. The enrollment period is intended to give people who have lost coverage during the pandemic a chance to sign up, but people who have already selected a plan for 2021 are also able to change their plan.

You can sign up at healthcare.gov or your state’s health insurance exchange site. Changes will be retroactive to January 1, 2021, so people already on ACA health insurance plans will get money back.

Other Benefits

Some laid-off workers may not have to seek out a new plan at all. The new law would also subsidize the entire cost for workers eligible for COBRA coverage to stay on their employer’s health plan for six months. (Laid-off workers who had health insurance through their employer are often eligible for COBRA coverage, which allows them to stay covered by the plan if they pay the full premium — including the portion previously covered by their employer.)

The law also relieves people of having to pay back tax credits they received in 2020 if their income ended up higher than they estimated during enrollment — a problem analysts say will be common for marketplace shoppers whose income was unpredictable and fluctuated significantly during the pandemic.

As a result of these efforts, more Americans will be able to afford health insurance in the coming years and thus seek out needed treatment.

Want to Get More Involved with Patient Advocacy?

The 50-State Network is the grassroots advocacy arm of CreakyJoints and the Global Healthy Living Foundation, comprised of patients with chronic illness who are trained as health care activists to proactively connect with local, state, and federal health policy stakeholders to share their perspective and influence change. If you want to effect change and make health care more affordable and accessible to patients with chronic illness, learn more here.

Gantz S. COVID-19’s tax-season surprise: You may have to pay back part of your ACA insurance subsidy. The Philadelphia Inquirer. March 1, 2021. https://www.inquirer.com/health/consumer/health-insurance-tax-credits-aca-marketplace-20210301.html.

McDermott D, et al. Marketplace Eligibility Among the Uninsured: Implications for a Broadened Enrollment Period and ACA Outreach. January 27, 2021. https://www.kff.org/private-insurance/issue-brief/marketplace-eligibility-among-the-uninsured-implications-for-a-broadened-enrollment-period-and-aca-outreach.

Quely K, et al. Obamacare’s About to Get a Lot More Affordable. These Maps Show How. The New York Times. March 10, 2021. https://www.nytimes.com/2021/03/10/upshot/stimulus-obamacare-lower-costs.html.

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