In yesterday’s post, Mai Naem Mobile made the following comment:
I believe my plan is about the same price. Anyway, what surprised me is I supposedly qualify for a subsidy. Did they change the income levels for a subsidy? I’ve never qualified for a subsidy and nothing has changed except for my age. I even increased the income to see if that would get rid of the subsidy and it didn’t.
This is the American Rescue Plan in action.
There were two major temporary policy changes in the ARP that passed in March. The first was to decrease the expected percentage a household earning between 100% to 400% Federal Poverty Level would have to pay for the benchmark premium. This varied by income, but for someone earning 150% FPL (~$19,000 for a single individual) they went from paying 2% of household income to 0% for the benchmark plan. Higher earners saw between 1.4% to 2% reduction in expected income contribution.
The second and more relevant fix for Mai Naem is that the ARP eliminated the income cap for subsidy eligibility. Under the original ACA, individuals who earn over 400% FPL (single individual ~$50,000) were completely ineligible for subsidies. The ARP removed that income cap. Individuals earning over 400% FPL now pay 8.5% of their income for premiums. As incomes increase and ages decrease, some people will still not qualify for subsidies, but as people get older, they are more likely to qualify for some subsidy which will make their current plan cheaper and potentially increase the value proposition of lower cost plans as well.
Both of these provisions are for the 2021 and 2022 plan years. Extending or making these provisions permanent are part of the reconciliation package currently under construction. Call your senators if you want these policies to continue.