Woman making free hand sign; free health insurance

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.

Income Premium Cap (max % of income for 2nd lowest silver plan)**
% Federal Poverty Level 2021
Under 100% No Cap
100% – 133% 2.07%
133% – 150% 3.10% – 4.14%
150% – 200% 4.14% – 6.52%
200% – 250% 6.52% – 8.33%
250% – 300% 8.33% – 9.83%
300% – 400% 9.83%
Over 400% No Cap

**Alaska and Hawaii have different poverty guidelines. The tax credits for the 2021 benefit year are calculated using 2020 federal poverty guidelines. | SOURCE: Kaiser Family Foundation6

How Increased Premium Subsidies Work on Bronze Plans

Bronze plans have the least expensive premiums. Although they have the highest out-of-pocket costs (such as deductibles and copays), they still provide all of the essential health benefits. Individuals who qualify for premium subsidies (tax credits) can use their credits on any metal plan, including bronze plans. Because of this, purchasing a bronze plan could be an inexpensive way to ensure quality coverage.

But for some with certain income levels, premium subsidies could equal the gross premium of a bronze plan, making it free. Remember Sandra from the example above? In order to get free health insurance and pay nothing in monthly premiums, Sandra would only need to find a plan in her area that was less than her premium subsidy of $380 per month. If the benchmark silver plan in her area was more expensive, her premium subsidy would increase. If Sandra’s income was lower, her premium subsidy would also increase.

Thanks to the American Rescue plan, low or no silver premiums, free bronze plans with zero premiums, and health insurance for other plan levels, may turn out to be common this year for those who qualify.

Free Health Insurance for the Unemployed

If you’ve received unemployment compensation for at least one week in 2021, you may qualify for a $0 premium silver plan. Depending on your income, you could be eligible for subsidies that cover 100% of the premium for a silver plan.9

See if You Qualify for Zero Premium Health Insurance

You might be closer to free health insurance than you think. HealthMarkets can help you determine if you qualify for a premium subsidy, at no cost to you. If you are eligible for $0 premium health insurance, HealthMarkets can help you evaluate if that plan is best suited for your needs with our innovative FitScore® technology. Just answer a few questions, and HealthMarkets will rank plans based on your preferences.

Even if you don’t qualify for a premium subsidy, HealthMarkets can help you compare plans on and off the health insurance marketplace. Start reviewing your options today.

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References

1. Congress.gov. Retrieved from https://www.congress.gov/bill/117th-congress/house-bill/1319/text#toc-HC2D7943A4CCA49B19DADC8E6CBAACF66 Accessed on March 15, 2021. | 2. New York Times. March 2021. Retrieved from https://www.nytimes.com/2021/03/10/upshot/stimulus-obamacare-lower-costs.html | 3. HHS. March 2021. Retrieved from https://www.hhs.gov/about/news/2021/03/12/fact-sheet-american-rescue-plan-reduces-health-care-costs-expands-access-insurance-coverage.html | 4. KFF. February 2021. Retrieved from https://www.kff.org/health-reform/press-release/two-new-analyses-house-covid-19-relief-plan-would-temporarily-lower-marketplace-premiums-for-millions-and-more-than-offset-short-term-state-costs-to-expand-their-medicaid-programs/ | 5. KFF. 2021. Retrieved from https://www.kff.org/health-reform/state-indicator/average-marketplace-premiums-by-metal-tier/?currentTimeframe=0&selectedRows=%7B%22wrapups%22:%7B%22united-states%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D | 6. KFF. October 2020. Retrieved from https://www.kff.org/health-reform/issue-brief/explaining-health-care-reform-questions-about-health-insurance-subsidies/ | 7. KFF. March 2021. Retrieved from https://www.kff.org/interactive/subsidy-calculator/#state=ks&zip=67548&income-type=dollars&income=30150&employer-coverage=0&people=1&alternate-plan-family=&adult-count=1&adults%5B0%5D%5Bage%5D=40&adults%5B0%5D%5Btobacco%5D=0&child-count=0 | 8. KFF. March 2021. Retrieved from https://www.kff.org/interactive/subsidy-calculator/#state=tx&zip=75220&income-type=dollars&income=55000&employer-coverage=0&people=3&alternate-plan-family=&adult-count=1&adults%5B0%5D%5Bage%5D=40&adults%5B0%5D%5Btobacco%5D=0&adults%5B1%5D%5Bage%5D=21&adults%5B1%5D%5Btobacco%5D=0&child-count=2&children%5B0%5D%5Bage%5D=10&children%5B0%5D%5Btobacco%5D=0&children%5B1%5D%5Bage%5D=12&children%5B1%5D%5Btobacco%5D=0 | 9. Georgetown University Health Policy. March 2021. Retrieved from https://ccf.georgetown.edu/wp-content/uploads/2021/03/American-Rescue-Plan-v2-3.pdf

 

Disclaimers:

* Premium subsidies will vary, depending on the area where you live, because premium subsidies are higher where silver plans cost more. The examples provided were generated using a subsidy calculator available on the marketplace and may not reflect the premium subsidies available to you, if you qualify.

HealthMarkets’ FitScore intends to identify plans that fit your needs. You should carefully review official plan materials.

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