The COVID-19 pandemic has wreaked havoc in the lives of Americans of all ages across the country. The American Rescue Plan Act (ARPA) was signed into law to help combat some of the negative effects the pandemic has had on peoples’ health and wallets. One impact that will be felt by many Americans is the improved affordability of health insurance coverage.

What is the American Rescue Plan Act (ARPA)?

The ARPA is a $1.9 trillion, multi-level act designed to address a variety of problems that have surfaced during the pandemic. Some of the key components of the plan include:

• Stimulus checks for individuals, couples, and families
• Extended unemployment benefits
• National vaccination program
• Scaled-up COVID testing
• Safe reopening of schools
• Protection for frontline workers from COVID
• Expanded paid leave to reduce virus spread

In addition, ARPA will affect new and existing health insurance plans, making premiums more affordable for millions of Americans nationwide.

How did the American Rescue Plan Act affect new and existing health insurance plans?

According to whitehouse.gov, between two and three million people lost employer-sponsored health insurance between March and September of 2020. Families who have maintained coverage may also be struggling to pay premiums and afford care with the economic strain of the pandemic impacting most of the country.

Whether you have private health insurance, lost coverage due to job loss, or are unable to afford a plan, the ARPA may benefit you. The legislation increases the number of people eligible for subsidies and offers zero-dollar premiums for people with lower incomes. Temporary provisions will make coverage significantly more affordable for many who currently have purchased a plan on the marketplace, lost employer coverage, or are uninsured.

The ARPA and income level

If you have income over 400% of poverty level, you may be eligible for subsidies you did not qualify for before the ARPA became law. So, for example, if you are only providing health coverage for yourself and your income is around $51,500 a year, then you may be eligible for a subsidy in 2021 that you would not have qualified for prior to the ARPA.

If your income is under the 400% threshold, you may qualify for additional financial assistance and see substantially reduced premium costs in some cases.

Under the ARPA, premiums for healthcare plans will be capped at 8.5% for nearly every income level. Average savings will be approximately $70 per month for those who currently have a marketplace plan. People with incomes under 150% will now have zero-dollar premiums for silver plans, as well as significant reductions in out-of-pocket expenses.

What changes will help uninsured individuals?

Even before the passage of the ARPA, more than half of all Americans who were uninsured were eligible for financial assistance to help them get insurance coverage. Under the ARPA, the eligible number has increased, with coverage options through the marketplaces, Basic Health Programs (BHPs), or Medicaid. Uninsured individuals can also sign up during the COVID special enrollment period. This enrollment period runs through August 15, 2021 on the federal exchange and will be open year-round on Covered CA.

What changes were made related to COBRA plans?

COBRA insurance coverage also saw changes under the ARPA. COBRA is a provision of the law that allows people who lose their employer coverage to keep that coverage for 18 months. Those who opt for COBRA must pay the entire premium for the plan, plus a small administrative fee. Under ARPA, the federal government will pay the entire COBRA premium from April to September 2021.

What changes were made related to ACA plan subsidies?

The ACA offers subsidies to help people with income levels between 100% and 400% of the poverty level pay for their insurance premiums. Those subsidies will increase for these individuals, so monthly premiums go even lower. The ARPA has also expanded subsidies to people with income levels above 400% of the poverty level, while people with incomes up to 150% of the federal poverty level will qualify for zero-premium plans.

What’s in store for the ARPA?

Currently, the American Rescue Plan Act subsidies are set to expire at the end of 2022. However, without these  subsidies, there’s a possibility that premiums could rise dramatically, which could leave millions of people uninsured or struggling to pay for healthcare services that will now cost a great deal more.

American Rescue Plan Act FAQs

How can you manage your health plan following changes to ARPA?

For those who took advantage of the lower-cost health plans or free COBRA coverage, it’s still possible to get low-cost health insurance through the marketplace exchange. The ARPA helped to expand coverage and increase benefits for middle- and lower-income individuals and families.

However, Obamacare subsidies still exist as part of the Affordable Care Act. Your state may also offer subsidies, discounts, or plans that aren’t cost prohibitive to people who have little to spend on healthcare coverage.

Marketplace healthcare plans have tiers, and those tiers have price ranges. It’s entirely possible that you qualify for or can afford a plan for yourself or your family that works just as well as the low or no cost plan you obtained previously.

The expanded Medicaid and CHIP coverage still exists, so these programs can also offer you coverage and care for yourself and your family if you’re eligible. The end of the ARPA subsidies does not mean the end of affordable healthcare options.

Who was most impacted by changes to the American Rescue Plan Act?

Changes to the American Rescue Plan affected insurance companies, employers, and even state governments. But in the end, the people most affected by changes to the ARPA are those who need healthcare coverage the most.

The signing of the ARPA into law saw an astonishing increase in people gaining healthcare insurance. This included millions of people who previously went uninsured because they couldn’t afford an individual or family healthcare plan.

Expanded subsidies allowed many people living below the poverty level to obtain the care they needed for themselves and their families. Losing the subsidies that allowed for this uptick in insurance adoption can create just as many uninsured people.

The good news is that the Affordable Care Act, the ARPA, and other legislation over the past few years have made healthcare insurance more competitive and more available to people, even without the ARPA’s subsidies.While the loss of those zero or low-cost plans can create a burden for many, there are still potential options to help someone gain coverage. 

Can eHealth help you with your health insurance after the ARPA?

A great way to find affordable healthcare solutions is through eHealth. eHealth allows those looking for the best insurance for their budget to look at the offerings from many healthcare insurance providers. The services offer healthcare plans for everyone at any stage of life. This includes the lowest cost plans in your specific area, a personalized health insurance quote, as well as options and help for Medicaid or other health insurance related services.

Find a subsidized health insurance plan today

At eHealth, our licensed brokers are committed to helping individuals and families in every state find a health insurance plan and can help you with any questions you may have related to how ARPA affects your coverage. We offer a wide range of plan options, making it easy for you to find a health insurance plan that fits your budget and coverage needs. eHealth also makes it easy for you to see if you qualify for a subsidy, and customer service representatives are available 24/7 to answer your questions. Check out all the individual and family health insurance plans available in your area to get started today!

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.  The above information is not intended to provide prices or coverage information for any specific insurance plan.  The specific benefits covered by any insurance plan will be stated in the official documentation for the plan.  Prices and rates vary by region and other factors.