Some Americans could receive free health insurance by qualifying for zero-premium silver and bronze plans. Why? Because as of March 2021, the federal government has enacted the American Rescue Plan Act. The American Rescue Plan Act temporarily expands the eligibility requirements for premium tax subsidies for Affordable Care Act (ACA) health plans, allowing millions of Americans to become eligible for reduced costs.1
“[The American Rescue Plan Act will] make it so the majority of uninsured citizens are eligible for free or low-cost coverage,” said Cynthia Cox, a vice president at the Kaiser Family Foundation.2 In fact, the Department of Health and Human Services estimates that health insurance premiums will decrease by an average of $50/month per person, and that four out of five enrollees will be able to find a plan for $10/month or less after subsidies.3
Want to find out if you’re one of the approximately 29 million people who could qualify for no premiums, lower premiums, or subsidies?4 Start reviewing your options with HealthMarkets now.
Silver Plan Rates Are Still High and Vary From County to County
The national average premium for Affordable Care Act (ACA)-approved silver benchmark plans sold on the government-run marketplace dropped from $442 to $436 from 2020 to 2021.5 However, premium changes vary widely depending on geography, and benchmark silver plan premiums remain high overall.
Thanks to the American Rescue Plan, you could end up getting a silver plan with a $0 premium, or very low-cost health insurance. If you earn around $19,000/year, the expanded subsidies could result in no monthly payment for you. If you earn more than $51,000/year, you could see lower premiums by as much as $1,000/month.2
Premium Subsidies
Let’s brush up on our premium subsidy (tax credit) knowledge. Premium subsidies are still in effect for 2021 coverage. If you are within 100% to 400% of the federal poverty level (FPL), you may be eligible. That’s an income of around $12,760 to $51,040 for an individual, or about $26,200 to $104,800 for a family of four.6
Real-world examples
Premium subsidies can be used on any metal level, but here are a couple of real examples (based 2021 subsidy calculations) of how increased premium subsidies (due to the American Rescue Plan) could mean $0 premium or low-premium silver plans for those who qualify. Remember: Premium subsidies will vary, depending on the area where you live.*
- Sandra is a single 40-year-old preschool teacher in La Crosse, KS, who will make an estimated $30,150 in 2021. Her premium subsidy would be $380 per month, which would pay for all but $87 per month for a silver plan. She could also enroll in a bronze plan for $0 per month. Without this financial help, her silver plan would cost $467 per month.7
- Sam is a married freelance graphic artist with two kids (aged 10 and 12) living in Dallas. He’s 40, and the family makes $55,000 per year. The premium subsidy for his family is $727 per month, which means he can enroll in a silver plan for $189 per month, or a bronze plan for $0 per month. The entire family can be covered without paying anything for the premium. In short, Sam qualifies for free healthcare insurance.8
How premium subsidies are decided
Premium subsidies work like this: A maximum amount that an individual or family is expected to spend on monthly premiums for health insurance is determined. The maximum amount is set using a benchmark plan and your income. The benchmark plan will always be calculated using the second-least expensive silver plan available in your area. The maximum amount ends up being a maximum percentage of your income that you can be expected to pay for the second-lowest silver plan. Any amount over your calculated maximum will be subsidized (or paid for) by the government.6 So, with silver plan premiums increasing, that means premium subsidies will also increase.
