On Jan. 28, about a week after President Joe Biden was inaugurated, the fledgling administration announced the first in a planned series of key health reforms.
The president ordered the temporary reopening of healthcare.gov, the federal government’s Affordable Care Act (ACA) insurance marketplace.
To millions of people in COVID-stricken America, the move promised a fresh chance to secure an affordable health plan.
Early success
Now, two and a half months later, we’re getting an indication of the measure’s popularity.
Last Wednesday, the Department of Health and Human Services (HHS) announced that 500,000 people had purchased Obamacare plans during the first six weeks of the Biden-mandated special enrollment period, which runs until Aug. 15.
Most notable, perhaps, is that these new enrollments occurred before generous new Obamacare subsidies — which were passed as part of Biden’s $1.9 trillion relief bill — took effect on April 1.
As a result of those subsidies, HHS estimates that about 6.8 million are eligible for coverage on healthcare.gov with no premiums at all and that 1.3 million could get coverage for less than $50 a month.
So there’s every reason to believe that, in the months ahead, many more Americans will be taking advantage of the opportunity to save big on health care costs.
How do the new subsidies work?
Biden’s bill ensures enrollees will pay no more than 8.5% of their income on health coverage — down from the previous 10%. Lower-income policyholders will be given subsidies that completely eliminate their premiums.
The new rules also extend help to those earning more than 400% of the federal poverty level, which works out to about $51,000 for individuals and $104,800 for a family of four.
The changes will qualify about 15 million uninsured Americans for financial assistance and offer 9 million people with subsidized plans even more help.
On average, you’ll see your premiums decrease about $50 a month. And anyone making more than $51,000 will be able to find coverage for about $1,000 less per month than before the bill was passed.
With that kind of money returned to your pocket, you could make a long-delayed purchase, put a dent on some lingering bills or finally get control of your debts.
What do I have to do?
If you’re already an Obamacare policyholder, the reduced premiums won’t just show up in your health care account.
To get your discount, you’ll have to go back to the website where you bought your health insurance plan and confirm that you want the new, expanded tax credit for your existing plan.
Unless you update your preferences, you’ll keep paying your current price until next spring, when you’ll get the difference back in the form of a refund on your 2021 taxes.
And if you haven’t bought your plan through the ACA marketplace, you’ll have to go back and cancel it and switch to an eligible plan.
What about the no-premium plans?
For lower income households, the relief bill offers no-premium plans with retroactive coverage to Jan. 1. Unfortunately, it’s going to take a few months to set up those benefits.
Those rates are unlikely to appear on the healthcare.gov site until this summer, meaning eligible Americans may have to split the application process into three separate steps by signing up for a plan, then getting the new income-based subsidies and finally applying for the special unemployment benefit once it’s ready.
What to do if you need money right now
Most people will have to wait several months or a year to see the difference in their bank account.
If your bills are piling up now and you need a little relief, you may want to consider folding your loans into a single, lower-interest loan to give yourself some breathing room and help get out from under your debt sooner.
And if you want to add a little more to your monthly budget, you have more options.
