All 50 states + DC have re-opened enrollment on their respective ACA exchanges in response to both the ongoing COVID-19 pandemic and the just-passed American Rescue Plan, which (among other things) substantially expands and enhances premium subsidies to potentially millions of people!
1. MILLIONS NOW QUALIFY FOR TAX CREDITS IN 2021 WHO DIDN'T IN 2020...AND IT CAN SAVE YOU THOUSANDS OF DOLLARS!
With the passage and signing of the American Rescue Plan, the ACA's infamous "Subsidy Cliff" has been killed at last (at least for 2021 & 2022, anyway)!
This means two extremely important things:
- First: If you're already eligible for ACA subsidies (i.e., you earn under 400% FPL), you'll likely see a significant increase in how much your'e eligible for.
- Second: If your income is higher than the original ACA subsidy eligibility threshold (i.e., over 400% FPL), you're now likely eligible for ACA subsidies for the first time!
Here's a table laying out the percent of your household income which you're restricted to paying for the benchmark Silver plan in your area under the original ACA formula and the new American Rescue Plan formula:
You can also read my more detailed explainer, including a bunch of case studies for comparison.
IMPORTANT CAVEAT: It could take some time for the exchanges to update their subsidy database & complete other structural/logistical updates to get the expanded/enhanced subsidies out to enrollees.
I've heard estimates ranging from "a week or so" up to "several months", so stay tuned...the additional financial assistance may be baked in as early as April or it might be retroactively applied later in the year.
I've also heard it might end up being included as a tax refund in spring 2022, at least for those already enrolled in exchange plans prior to the bill being signed into law. This may vary depending on which state you live in (that is, which ACA exchange website you use).
2. DON'T MISS THE NEW DEADLINE!
Most states have re-opened enrollment through 5/15, but the dates vary:
It's important to note that in 9 states + DC it will only be available to those currently uninsured (or enrolled in off-exchange individual market plans). In other words, those currently enrolled in an exchange plan may not be able to switch to a different one mid-year. I've whipped up a simple graphic summarizing the status of every state:
Once the COVID-19 Enrollment Period ends in your state, you won't be eligible to enroll for ACA-compliant major medical coverage for the rest of the year unless you qualify for a 60-day Special Enrollment Period (SEP) due to a qualify life event like losing your employer-provided healthcare coverage, getting married/divorced, moving, giving birth/adopting a child, turning 26 or becoming ineligible for Medicaid.
There's also some exceptions to this; you can enroll year-round if...
- You're eligible for Medicaid or CHIP (any state);
- You're a member of a federally-recognized Native American tribe or you're an Alaskan Native (any state);
- You're eligible for MinnesotaCare (Minnesota only), the Essential Plan (New York only) or ConnectorCare (Massachusetts only)
3. MAKE SURE YOU'RE ENROLLING IN ACA-COMPLIANT COVERAGE!
There's a ton of junk plans and scam artists out there, especially these days. Fraudulent plans are being hawked endlessly via both robocalls, spam emails and fly-by-night websites. If you're enrolling online, make sure to use one of the official ACA exchange websites:
4. THE INDIVIDUAL MANDATE MAY BE GONE FOR MOST STATES, BUT IT'S STILL AROUND IN FIVE OF THEM!
One of the most sickly ironic things about the ACA being in jeopardy due to the federal individual mandate penalty being zeroed out is that there are actually five states which have re-instituted their own healthcare coverage requirement:
- CALIFORNIA
- DISTRICT OF COLUMBIA (I know, it's not actually a state...yet)
- MASSACHUSETTS
- NEW JERSEY
- RHODE ISLAND
In CA, DC, NJ & RI, the penalty is pretty much identical to the old federal penalty: Either $695.00 per adult or $347.50 per child in the household or 2.5% of the total household income, whichever is greater.
Massachusetts uses a different formula. The financial penalty will be charged when residents file their 2020 state taxes in 2021.
5. RESIDENTS OF FOUR STATES MAY QUALIFY FOR ADDITIONAL SUBSIDIES!*
Federal ACA exchange subsidies to cut down on premiums are available, on a sliding scale, to households earning between 100 - 400% of the federal poverty line (up to around $51K for a single person or around $105K for a family of four). Addional subsidies to cover deductibles and other out-of-pocket costs are available to households earning 100 - 250% FPL.
There are two types of federal ACA subsidies. APTC (Advance Premium Tax Credits) cuts down on premiums. CSR (Cost Sharing Reduction) subsidies cut down on deductibles, co-pays & coinsurance, though CSR is only available up to a lower income level and is only available on Silver plans.
There are four states which are offering additional subsidies to exchange enrollees, however:
- CALIFORNIA
- MASSACHUSETTS
- NEW JERSEY
- VERMONT
Vermont and Massachusetts have had their state-based subsidy programs in place since the very first Open Enrollment Period in 2014, available to enrollees earning less than 300% FPL. Massachusetts actually has a whole different category of exchange policies for this population called ConnectorCare, while Vermont quietly tacks their subsidies on to regular ACA plans.
California launched their state subsidies in 2020. In their case, they enhance subsidies modestly for those earning 200 - 400% FPL while also extending new subsidies to those earning 400 - 600% FPL (up to around $76K if you're single or $157K for a family of four).
Starting in 2021, along with New Jersey's new state-based exchange, they're also offering additional subsidies to all exchange enrollees earning 100 - 400% FPL. For the first year of the program the state is simply dividing the funds up evenly among all on-exchange enrollees evenly, which they figure will come to between $564 - $840/year apiece, or roughly $47 - $70/month. This should bring many people's net premiums down to $0 (I'm assuming that it won't result in negative premiums, though it's conceivable this could happen for the first year given the lack of a sophisticated mechanism to calculate how much everyone is supposed to receive).
*IMPORTANT: It’s possible that some or all of these state-based subsidy programs will be modified or even rendered moot by the passage of the American Rescue Plan...especially in California, where the state subsidies have focused in large part on those earning 400 - 600% FPL.
Until now, folks in that income range weren't eligible for any financial subsidies; now they're eligible for assistance which will bring premiums down far lower than California's do anyway.
6. VIA SILVER LOADING, SOME SUBSIDIZED ENROLLEES MAY BE ABLE TO GET ZERO-PREMIUM BRONZE PLANS...OR EVEN ZERO-PREMIUM GOLD PLANS!
- As I explain here, nearly every state have loaded the full Cost Sharing Reduction (CSR) amount onto Silver plans only. This means that Bronze & Gold plans will only go up the normal amount, while Silver plans will go up a lot...but the tax credits (for those eligible) also go up a lot to match the Silver increase, and those credits can be applied to any exchange plan. The end result of this means subsidized enrollees may end up getting a Gold plan for less than Silver, or a Bronze plan dirt cheap (or even free!). In fact, depending on where they live and what their household makeup is, some people will even qualify for a zero-premium GOLD plan!
UPDATE 3/11/21: Hoo-boy! Passage of the American Rescue Plan means that all of the list of counties where free Bronze and/or Gold plans are available is about to dramatically increase! Stay tuned...
Therefore, SHOP AROUND, SHOP AROUND, SHOP AROUND!
7. WHATEVER YOU DO, *DON'T* ALLOW YOURSELF TO BE *PASSIVELY* AUTO-RENEWED!
NOTE: This one only really applies during the regular Open Enrollment Period in the fall/winter, but it's good advice to keep in mind regardless.)
Again, the plans, pricing and tax credits you may be eligible for can change dramatically from year to year even if nothing significant changed at your end (income, household size, etc).
That means that anyone who doesn't log into their account at HealthCare.Gov, CoveredCA.com, etc. enter their current information and actively pick the plan they want next year could end up missing out on hundreds or thousands of dollars in financial help, a better-value plan, or both.
Therefore, I'll say it again: SHOP AROUND!
8. (SIGH) YES, THE SUPREME COURT COULD POTENTIALLY STILL STRIKE DOWN THE ENTIRE LAW, *HOWEVER*...
It would be wrong of me not to remind folks that yes, there's still a pending anti-ACA lawsuit decision expected to be announced sometime this spring or summer by the U.S. Supreme Court.
I've written about the details (and how idiotic the case is) too many times to remember...and for the average person, none of that matters. What matters to them is whether the SCOTUS strikes down the law and when they're gonna announce their decision.
As bad as the Worst Case Scenario would be, keep in mind that it's not a sure thing by any means, even with a 6-3 conservative SCOTUS. During oral arguments in the case last November, even ACA-hating Justice Alito seemed extremely skeptical about the plaintiff's case, while Chief Justice Roberts and Trump appointee Kavanaugh both seemed extremely inclined to lean towards "severability"...that is, even if they rule that the ACA's individual mandate is unconstitutional, there's a very strong chance that they'd simply require the mandate language itself to be stricken, leaving the rests of the law as is.
Heck, even Trump's final appointee, Amy Coney Barrett, had already shot down the exact same argument in a mock trial of this exact case before she was appointed to the Supreme Court.
So...there's a good chance that either the entire ACA (or 99.9% of it) will be spared. That's not a guarantee, of course; anything can still happen, which is why I've been urging Congress to #MootTheSuit.
It's also not necessarily a binary decision. SCOTUS could potentially kick the case back down the ladder to the 5th Circuit Court of Appeals again, in which case it might bounce around between the Circuit and SCOTUS for another year or two. Who knows?
In any event, keep in mind that even in a worst-case scenario (which, I agree, would be horrific), no one who signs up for ACA exchange coverage during the current COVID Enrollment Period will be any worse off than they are right now; don't let this possibility discourage you from enrolling now. Even a few months of coverage is still better than no coverage at all.
9. (for 2021 only): IF YOU'RE ON UNEMPLOYMENT THIS YEAR, YOU'RE ELIGIBLE FOR A $0-PREMIUM CSR94 PLAN...EVEN IN "MEDICAID GAP" STATES!
One particular provision of the American Rescue Plan gets a little wonky, but it could be critically important for hundreds of thousands of people living in the 12 states which have refused to expand Medicaid under the Affordable Care Act (Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas and Wyoming (Wisconsin hasn't expanded Medicaid either but is a special case).
The short version is that under the ARP, for 2021 only, anyone who receives unemployment benefits will be considered to have an income of 133% of the Federal Poverty Level even if they actually earn less than that...or, for that matter, more than that. This means that someone in a "Medicaid Gap" state (where adults who earn less than 100% FPL are normally not eligible for either Medicaid or ACA subsidies) will be legally authorized to be treated as if they earn 133% FPL...and therefore will be eligible for 100% APTC subsidies.
In other words, Americans receiving unemployment insurance this year only will be eligible for a $0-premium Silver plan and will also be eligible for high Cost Sharing Reduction assistance, which bring their deductibles, co-pays and other out of pocket expenses down dramatically.
The effect of this is that they'll be eligible for the equivalent of a "Platinum Plus" ACA policy, which covers 94% of the average enrollee's medical expenses (Platinum plans cover 90%; Gold 80%; Silver normally covers 70% and Bronze covers 60%).
This won't resolve the Medicaid Gap completely, but it should provide comprehensive, extremely low-cost coverage for a huge chunk of the 2.2 million people caught in the Gap.
oh, and as part of this...
10. (for 2021 only): IF YOU'RE ON UNEMPLOYMENT THIS YEAR, YOU *MAY* BE ELIGIBLE FOR A $0-PREMIUM CSR94 PLAN EVEN IF YOU EARN *MORE* THAN THE NORMAL CUT-OFF TO DO SO.
(Warning: I'm not 100% certain about this one yet)
Notice what I said above:
under the ARP, for 2021 only, anyone who receives unemployment benefits will be considered to have an income of 133% of the Federal Poverty Level even if they actually earn less than that...or, for that matter, more than that.
Again, I could be wrong, but if I'm correct about this, it means that if you're on unemployment for part of 2021 but your fortune improves later this year and your total annual income ends up being 200%, 300% or even 400% FPL, this same provision of the ARP means that you would still be considered to have earned just 133% FPL in 2021 for purposes of Advance Premium Tax Credit (APTC) eligibility.
If so, that means some middle-income (or even higher?) could potentially also receive the equivalent of a Platinum Plus plan for nothing (or next to nothing) this year specifically.
At first this made little sense to me, but then I remembered that the ARP is also providing 100% premium subsidization of COBRA enrollees, regardless of their income, from April - September of 2021. The reason COBRA is usually extremely expensive is because the policy attached to it is often very high end...Gold or Platinum. In other words, it's not a huge stretch from the federal government paying 100% of COBRA premiums to the government paying 100% of ACA premiums, even for middle- or high-income folks.
In other words...#GetCovered!
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