Obamacare aid could offer more Pa. benefits
Lower and middle income earners who skipped over Affordable Care Act health insurance this year because the coverage cost too much will want to think again by May 15 when a special enrollment period ends in Pennsylvania.
The $1.9 trillion American Rescue Plan passed by Congress on Wednesday dramatically expands premium subsidies and adds other enhancements that make the insurance, dubbed Obamacare, less costly. In addition, the new health insurance benefits contained in the bill, which is expected to be signed by President Joe Biden on Friday, will be retroactive to the date of enrollment.
“It finally helps people who’ve been passed over by the Affordable Care Act, which is basically the working person,” said Aaron Zolbrod, owner of the Health Insurance Store, which has offices in Forest Hills. These are the people who will be getting the biggest savings.”
For two years, the legislation will boost subsidies for health insurance purchased through the federal government exchange and through Pennie, Pennsylvania’s ACA marketplace, while capping the amount paid for coverage at 8.5% of the person’s income, down from 10% now.
About 25,000 Pennsylvanians who don’t have health insurance will be eligible for a free bronze level plan or a low-cost silver plan with a low-cost deductible.
People receiving unemployment benefits or who have purchased health insurance through COBRA will pay no premiums, at least for six months.
Middle- class wage earners, those earning more than 400% of
the federal poverty level — $104,800 for a family of four — will be eligible for assistance for the first time. Tax credits were previously only available to people with incomes between 100% and 400% of the federal poverty level — $12,760 and $51,040 for one person.
“That’s really a big deal for a lot of people,” state Insurance Commissioner Jessica Altman said. “It’s just such a hopeful opportunity. There are really some significant enhancements to the financial assistance.”
Some examples: A 45year-old woman with an income of $60,000 will see her monthly premium go down $89, from $514 to $425; a 60year-old couple with income of $75,000 will see premiums fall $1,402, from $1,933 to $531, according to the Pennsylvania Budget and Policy Center, a nonpartisan Harrisburg-based public policy research center. In addition, 26% of the uninsured in Pennsylvania, 96,216 people, will be eligible for a free bronze level or low-cost silver plan.
At least one-third and up to one-half of people enrolled in health plans through Pennie will see their premiums go down, according to the Budget and Policy Center. Some 338,000 Pennsylvanians are signed up for Obamacare insurance.
The cost of health insurance is especially burdensome for older middle-income people who live in rural areas, according to the Centers for Medicare and Medicine Assistance. As it is, a 60-year-old person earning over the 400% cutoff for ACA subsidies, or just over $51,520 a year, would pay an average of $12,886 per year in premiums, which is about 25.8% of their income.
Health insurance subsidies depend on the applicant’s income, age and their area’s average health insurance premium. An online calculator developed by the Kaiser Family Foundation can help compute the anticipated savings on monthly premiums.
The state’s uninsured rate was 5.4% in a survey taken before the outbreak of the COVID-19 pandemic, Ms. Altman said, adding that it has likely increased since then.
Nationwide, the new subsidies were expected to attract the uninsured, according to a Congressional Budget Office analysis, which estimated that 1.7 million people, including 1.3 million people without health insurance, will be eligible for premium tax credits.
The legislation contains the biggest subsidy increase since the ACA was signed into law in 2010, a time when many health insurers opposed it. Insurers have come to embrace it since then, and the enhancements contained in the new law could prompt carriers to expand their marketplace products, said Sabrina Corlette, senior research professor, Georgetown University Center on Health Insurance Reform.
“It’s funny what a difference 10 years makes,” she said. “Now, they’re coming out in strong support for these provisions.”