The American Rescue Plan signed into law by President Biden last week will pump $34 billion into the Affordable Care Act, reducing monthly premium costs for most of Maine’s 63,000 people with ACA marketplace insurance.
The savings on average are about $50 per month but could reach into the hundreds depending on income level, what plan is chosen and other factors.
Mainers can sign up for the plans now, and starting on April 1 at healthcare.gov they can see the impacts of the new subsidies on monthly premiums. Those with existing plans who re-enroll now in the same plan will get the enhanced subsidies and lower premiums in the next month. Enrollment continues through May 15.
The $1.9 trillion pandemic relief law is getting a lot of attention for its $1,400 stimulus checks and expansion of child tax credits, but the law is the first major expansion of the ACA since former President Barack Obama signed it into law in 2010. The ACA also has survived repeal attempts and court challenges, including when Congress nearly torpedoed the law in 2017 when Republicans controlled the House, Senate and White House. Three Republicans, including Sen. Susan Collins of Maine, bucked their party to save the law.
“It’s monumental,” said Ann Woloson, executive director of Consumers for Affordable Health Care, an Augusta-based advocacy group. “This is meaningful assistance for so many people. People who may have lost income during the pandemic, and that extra $50 per month that they’re not paying in premiums can help them buy gas or put food on the table.”
The average reduction in premiums is $50 per month, according to the U.S. Department of Health and Human Services. It’s difficult to say how much premiums will decline for each person, because people have many options to purchase plans, and the cost of plans depends not only on income, but also family size, age and geography.
For many, the savings can be in the hundreds of dollars per month in premium costs. According to a premium calculator by Kaiser Family Foundation, a national health policy research center, a 60-year-old in a family of four who earns $50,000 per year purchasing individual insurance through the ACA would see premiums decline from $253 per month to $68 per month for a silver plan. ACA plans are designated bronze, silver or gold, with bronze featuring the cheapest monthly premiums but higher deductibles and co-pays, gold plans with higher monthly premiums but lower deductibles and co-pays, and silver plans in between those two choices.
Those earning between 138 percent and 150 percent of the federal poverty level – from $36,750 up to $39,750 for a family of four – can get a zero premium silver plan.
Some of those earning more than 400 percent of the federal poverty level, or $106,000 for a family of four, also will receive assistance on their premiums for the first time. The new law caps premiums at 8.5 percent of annual income, which for some, especially those in their 60s who are not yet eligible for Medicare at age 65, will result in savings. For instance, a 60-year-old who earns $125,000 per year and has a family of four would see silver plan premiums decline from $957 per month to $885 monthly.
Mitchell Stein, a Maine-based independent health policy analyst, said for those earning more than 400 percent – often small-business owners who don’t have access to employer-based health insurance – knowing that premiums are held in check at 8.5 percent of annual income is a big help. The unsubsidized plans were often subject to huge premium increases from year-to-year.
“That may draw more people into the marketplace who had decided it was too expensive,” Stein said. “Instead of the cutoff being 400 percent everyone will now have access to more affordable care.”
About 8,000 Maine people who currently pay for a marketplace plan earn more than 400 percent of the poverty level. ACA enrollment dipped in Maine from 71,000 in 2019 to 63,000 in 2020, but Maine expanded Medicaid in 2019 after Gov. Janet Mills took office. Some people who had previously qualified for ACA plans are now instead in the Medicaid program.
Stein said the new law will “have an outsize effect in a state like Maine, with an older population, and a lot of retirees (under age 65) and small business owners.”
“It’s an historic enhancement to the law,” Stein said.
Patricia Washburn, 55, a technical writer from Portland, said she has ACA coverage and now pays a $660 monthly premium. Because the premiums are not more than 8.5 percent of her income, she will not personally benefit from the new law, but she said she still supports the law’s improvements.
“I think it’s awesome, because it’s going to make a huge difference in health care costs for so many people,” Washburn said.
Woloson, with the Augusta-based Consumers for Affordable Health Care, said those who qualify for more generous subsidies and forget to sign up for them this spring will receive a rebate when they file their federal income taxes next year.
Anyone with questions is encouraged to visit coverme.gov or call 800-965-7476.
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