The American Rescue Plan Act enacted last March created a huge revision to the Affordable Care Act (aka Obamacare) that has made the best health insurance more affordable to more Americans, regardless of income.
Even applicants with higher incomes will now be eligible for meaningful subsidies for 2022. And many people with low incomes who were previously required to pay as much as 4% of their income in premiums now will pay nothing for coverage.
That makes it worthwhile for uncovered individuals and families of any age and any income to check in at Healthcare.gov to find the best plans in their state and to see what kind of subsidy they can receive. Even people who currently carry individual insurance may find that the new expanded subsidies make it worthwhile to buy that same plan on the Healthcare.gov marketplace, since the subsidy could reduce their premiums.
The sign-up period for these ACA plans — gold, silver and bronze — started Nov. 1 and runs through Jan. 15, 2022.
Reduced monthly premiums and better access to care
The new ACA definition of “affordable care” says no one should pay more than 8.5% of their income in health insurance premiums. The specific amount of the subsidy you receive on an ACA plan is determined by your age (and the age of your spouse or dependents) as well as your location and income. It’s also based on the cost of a benchmark silver plan in your state.
In the past, many people avoided the exchange plans listed at Healthcare.gov because they felt their access to favorite physicians or hospitals would be limited. Now, well-known insurers such as Blue Cross Blue Shield and Humana are offering their top-of-the-line individual plans in many states through Healthcare.gov.
Many of these plans offer an extensive HMO or PPO network, typically in the gold plan tier. Or you can choose a silver or bronze plan with less expensive monthly premiums and more restrictions, such as higher deductibles and copays. No matter which plan you choose, the premium is reduced by the amount of your subsidy.
Finding your premium tax credit, or subsidy
Finding your monthly subsidy amount is easy, without even revealing your identity. At Healthcare.gov, click on “Get Ready to Apply.” You’ll be asked only three simple questions: your age, ZIP code and estimated income for 2022. Then you can easily add a spouse (including age and income) or a dependent child.
The site instantly calculates the amount of your monthly subsidy. Then you can filter plans being offered in your area to find the least expensive in the gold, silver or bronze category — or the ones that include your favorite physicians. You can instantly compare monthly costs — after your premium subsidy is applied.
But be sure you’re not just looking at low monthly premiums. Check potential total deductibles and the limit on out-of-pocket costs with each plan before deciding. Then you can click and apply instantly.
If you’re wondering about those subsidies, here are a couple of examples. But it’s worth checking in at Healthcare.gov to find your own specific credit.
— A couple living in Illinois (male age 60 and female age 55) with combined income of $100,000. Before these new ACA changes, they would have been ineligible for a premium subsidy. But now, their subsidy will be $490 a month, regardless of which plan they chose.
— A woman in Illinois, age 55, expected to earn $55,000 in 2022. Under the old rules, she would not have qualified for a subsidy. But under the new more affordable rules, she will receive a subsidy of $151 a month.
Obviously, your ultimate monthly premium cost depends on the plan you choose. But searching at Healthcare.gov is essential, because in many big cities there are more than 100 plans to chose from.
Whether you currently have coverage or have gone uncovered because of cost, the game has now changed. Start your search for coverage at Healthcare.gov immediately. The new low cost may surprise you. And you never know when you’ll have an expensive health emergency. That’s The Savage Truth.
Terry Savage is a registered investment adviser and the author of four bestselling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.
©2021 Terry Savage. Distributed by Tribune Content Agency, LLC.