Federal stimulus improves affordability of private health coverage; CoveredCA to open special enrollment period

March 30, 2021

The $1.9 trillion stimulus bill recently signed by President Joe Biden—known as the American Rescue Plan—increases and expands eligibility for Affordable Care Act (ACA) premium subsidies for people enrolled in marketplace health plans. It also expands access to federal premium subsidies, making them available to people earning more than four times the federal poverty level (FPL) for the first time.

Under the new law, the U.S. Department of Health and Human Services (HHS) estimates that nationwide premiums will decrease an average of $50 a month per person, with some people saving hundreds of dollars each month. The new subsidies and reduced premiums will be available beginning April 1, 2021.

According to Covered California—our state’s health insurance exchange— uninsured Californians earning between $19,000 and $32,000 per year – comprising two thirds of the eligible uninsured – can enroll in a benchmark Silver plan (with reduced cost sharing) for an average cost of $61 per month, and virtually all can get a Bronze plan for $1 per month per member.

Current Covered California consumers will pay an estimated $119 less per month per household on average, which translates to an average savings of $1,428 per year. And off-exchange consumers earning over 400% FPL a will receive on average of $500 per month in federal financial assistance if they enroll with a Covered California plan.

Covered California estimates that the American Rescue Plan will provide over $1.5 billion in new financial help for current enrollees alone.

To help consumers benefit from these new subsidies, Covered California will launch a special open enrollment period starting April 12, 2021, which will continue through the end of 2021. HHS has also created a special open enrollment window for those seeking coverage through Healthcare.gov, which will remain open through August 15, 2021.

The law also creates new, temporary premium subsidies for COBRA continuation coverage; temporarily changes the rules for year-end tax reconciliation of marketplace premium subsidies; and makes changes to the Medicaid program designed to increase coverage, expand benefits and adjust federal financing. Collectively, these changes will make coverage more affordable for millions of Americans. 

Consumers can find out how much of a subsidy they might be eligible for using the Kaiser Family Foundation’s subsidy calculator.

Although when the special enrollment period opens on April 12, consumers will be able to sign up for the new lower premiums for coverage that begins May 1, Covered California is encouraging consumers to enroll now for coverage that begins April 1 and they will get money back for April through a credit on an upcoming bill. 


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