What exactly is the American Rescue Plan of 2021?

Early in the new year of 2021, the Biden Administration implemented The American Rescue Plan (ARP) with the intent of reducing health care costs and expanding access to health insurance plans.

There are currently over 9 million Americans accessing health care through the Affordable Care Act Marketplace, which provides subsidized plans with lower premiums based on household income. Their goal is for there to be at least a few plan options available to every consumer at a monthly premium no more than 8.5% of their household income.

For example:

  • Uninsured couples earning over $70,000 annually could save more than $1,000 per month on their premium
  • A family of four making $90,000 annually will see their premiums decrease by $200 per month
  • A single individual making $19,000 annually will be able to find health insurance coverage with no monthly premium at all, saving roughly $66 per month on average

This plan also introduced an extended Open Enrollment Period that in past years ended on December 15th for the coverage to be effective the following year. For 2021, that new period was from January 15th-May 15th but has now been extended even further to August 15th and coverage can be effective on the 1st of the following month.

The ARP is reevaluating the level of subsidy that Americans qualify for based on their income. Those with new or existing Marketplace plans can visit www.healthcare.gov or call the Marketplace directly to confirm whether or not their tax credit will be increased, resulting in lower out of pocket monthly premium responsibility for the insured. You can also wait until you file your 2021 taxes next year to get the additional premium tax credit amount. However, it is recommended that you update your application and review your plan options during the allotted period up until August 15th.

There is something to keep in mind regarding coverage if you change plans during this time. It is important to consider the new plan’s deductible as it’ll likely start over. If you change plans or add a new household member, any out-of-pocket costs you already paid on your current 2021 Marketplace plan probably won’t count towards your new deductible, even if you stay with the same insurance company.

These are variables that a licensed agent or Marketplace representative can discuss as they pertain to specific situations. The website again for resources regarding the Affordable Care Act is www.healthcare.gov.

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