Health care costs have been front of mind for millions of Americans in recent years, and the economic issues surrounding the novel coronavirus pandemic have likely compounded these concerns for millions. After all, health care in the U.S. is intrinsically tied to employment and the unemployment rate in America climbed to nearly 15% at one point in 2020.
In the time since, the American Rescue Plan has been signed into law and is specifically designed to provide economic help to most residents of the country. Now, some may be wondering whether the many changes the law enacts will have an effect on how they deal with health care, both logistically and financially. The good news is the answer, for millions, is "yes." The Kaiser Family Foundation recently broke down some of the health care-related changes in the ARP, including the fact that people making up to 150% of the federal poverty level can obtain "silver" health insurance plans from Healthcare.gov (or state-run exchanges) with no premiums and dramatically scaled-back deductibles.
Likewise, premium subsidies for people making up to 400% of the FPL have been increased as well, meaning it will be more affordable for those people to obtain plans through government-run exchanges. Moreover, the ARP allows people making more than that 400% level to also begin receiving subsidies for their premiums. However, it's worth noting that many of these rules only apply for 2021 and 2022. Other benefits include enhanced subsidies for workers currently experiencing unemployment, a retroactive premium tax credit repayment holiday for the 2020 tax year, and increased COBRA premium subsidies for the remainder of 2021.
Many of these changes for insurance on Healthcare.gov will go into effect as of April 1, but state-run exchanges do not have a uniform date by which the new subsidies will be listed on their sites.
Exploring the possibilities
At the same time as the ARP is changing the ways in which people receive either private coverage through the public exchanges or health insurance via a government programs, there is also an impact on private coverage obtained outside the exchanges. This may be coverage sought out by individuals, or group insurance as a result of employment or enrollment in a group such as a labor union. HealthInsurance.org notes people should ensure their coverage is compliant with the rules of the Affordable Care Act, and if so, that they are getting the best deal they can — especially if they purchase their coverage individually. Buying off-exchange can be helpful in some cases, but with the new subsidies, those who have such plans might want to explore their options.
Along similar lines, people who were previously enrolled in lower-level coverage purchased on the exchanges — i.e. "bronze" plans — might want to look into how much financial sense it would make to upgrade to a "silver" plan now that there are more allowances for financial flexibility and assistance. Even those who previously paid full freight for their premiums (as a result of an income higher than 400% of the FPL) might want to look into how the ARP has altered their access to subsidies.
As noted above, many of these changes are only going to be in effect for 2021 and 2022. This will obviously change the health care landscape in the near term, but according to Insurance News Net, there may be a years-long effect on health care and costs stemming from the ARP as well. That's because the ARP has a number of benefits for care providers and others built into it too.
For instance, the law made it easier for people who are on Medicaid to access treatment for COVID-19 (including vaccinations, which are effectively free to all Americans), as well as eliminating the cap on Medicaid rebates for prescription drugs.
In addition, the ARP expanded financial support from the federal government for a program known as the Provider Relief Fund, targeted at health care providers, with $8.5 billion set aside for rural organizations. The law also increased funding for public health grants around mental health and substance abuse, among other things.
What about veterans?
Finally, it should come as little surprise that the nation's veterans also got more assistance around health care as part of the ARP. The U.S. Department of Veterans Affairs pointed out that the bill designates some $14.5 billion for veterans to receive COVID-related health care, as well as upgrading the VA's facility and IT capabilities. Furthermore, the bill earmarks $1 billion for debt forgiveness around VA health care and prescriptions accrued between April 6, 2020, and Sept. 30, 2021. Altogether, veterans are getting more than $17 billion in assistance via the VA.
This is certainly the kind of thing health insurers would do well to explain to policyholders, so they can make the most informed choices about their coverage and find something that works for their unique health and financial needs simultaneously.