How Will the New COVID Relief Bill Affect Health Insurance Premiums


One of the largest relief packages in U.S. history, the American Rescue Plan Act of 2021, gives about $34 billion to aid Americans in buying health insurance.  The provisions in the bill do expire in two years, however, there may be a push by Democrats down the road to make them permanent.

Among the biggest winners in President Biden’s $1.9 trillion COVID relief package are those who buy health insurance on the federal marketplace exchanges, which in California is Covered California.  The bill includes a provision that caps what an insured would pay for premiums on the exchange to 8.5 percent of income.  It also provides for those who find themselves unemployed due the pandemic, allowing them to buy health insurance on the exchanges even though they are receiving unemployment benefits, which typically excludes them from getting subsidies. 

Another key aspect of the bill addresses those who are on COBRA, the program that allows workers to buy coverage offered by their former employer.  The bill would pay 100 percent of the COBRA premiums from April 1, 2021 to September 30, 2021.  The bill also includes incentives for states that did not expand Medicaid to do so, allowing more people to qualify for help from the federal aid program.



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