American Rescue Plan and Healthcare Insurance

American Rescue Plan and Healthcare Insurance

Introduction

The American Rescue Plan (ARP) of 2021 is a relief plan for the US population. Due to COVID, there is a recession worldwide, so the US government has taken new measures to provide relief to people. President Biden signed the ARP act recently, which includes a sum of $1.9 Tn. There are many provisions for people under this act, and the most captivating of them are $1400 payments, extended insurance benefits, and child tax credits.

Besides the provisions mentioned above, many other provisions in the ARP act aim to reduce Americans’ healthcare costs. This act primarily expands the Affordable Care Act (ACA) subsidies, introduces new COBRA subsidies, and improves Medicaid coverage. These steps can help reduce healthcare costs and financial strain upon people due to the pandemic. 

How Does This Act Help With Your Health Insurance?

The new bill will benefit you in terms of lowering costs for healthcare. Below, we’ll discuss several ways to help you understand how the bill will reduce the cost. 

1. Expansion of Subsidies

Premium tax credits are a form of ACA’s subsidy, and it’s only for people who earn between 100-400% of the Federal Poverty Level (FPL). FPL is an index that shows the bracket of income for people, and it becomes a basis for determining healthcare costs for people. The 100-400% FPL includes income from $12880 to $51520. People who were earning more than 400% were unable to receive any kind of benefit because their earnings were high but not high enough to afford a full-price premium. 

The new act removes this bracket, and now everyone is eligible to qualify for the subsidy if they pay 8.5% of their income for coverage, regardless of their income. Individuals with income below 100% of FPL are also eligible to apply for a Silver-tier health insurance program. Therefore, if you’re someone who’s under such circumstances and you are at the extreme of the bracket; you can now benefit from subsidies. 

There is another new subsidy by the name COBRA. It’s mainly for those people who lost their health insurance due to job losses. Fortunately, COBRA helps such individuals because it allows them to stay on an employer’s health insurance plan for 18 months after losing their job or health benefits. The COBRA program is the program that can help you in your unemployment stage. 

2. Expanding Medicaid

Some new Medicaid laws are for the benefit of the lowest income group. The new laws allow the state to provide postpartum coverage for new mothers and expand the vaccination and testing services of COVID-19. Moreover, the new regulation also provides funds to conduct research and development for future vaccinations and advancements in the current one. 

Besides, people receiving unemployment benefits are considered on equal footing, with people making 133% of income, according to FPL. This means that such people are eligible for a $0 premium plan plus cost-sharing reductions, including a reduction in co-payments and deductibles. 

3. Mental Wellbeing

COVID-19 had a very negative effect on Americans’ physical health and mental health. From the data that we have gathered from Kaiser Family Foundation, 4 out of 10 adults experienced anxiety or depression during the pandemic than just one out of ten in January 2019. 

Given this pattern, the American Rescue Plan will include $80 million to the Pediatric Mental Health Care Access Initiative, a telehealth-based program that facilitates behavioral health incorporation into pediatric primary care.

Another $420 million is set aside for Community Behavioral Health Clinics, which are tasked with providing a wide variety of mental health and substance abuse disorder services to those in need.

4. Expanded Unemployment Benefits

People who receive or will be receiving unemployment insurance (UI) benefits for any week in 2021 will benefit from increased marketplace subsidies under the ARP.

It also retains pandemic-related unemployment aid which was due to expire on March 14, for another six months through September 6, including the new $300 supplement to unemployment benefits. The first $10,200 in unemployment insurance earned by taxpayers earning less than $150,000 is exempt from federal income taxes.

5. Transportation Is Boosted

There is a provision of $30.4 billion in grants to transit agencies, which can be used for operating expenditures. Including payroll and PPE, and $1.7 billion for Amtrak in the fiscal year 2021, including funds to recall furloughed employees and restore long-distance route frequency.

6. Provides Housing Aid

 $21.6 billion for emergency rental assistance and $10 billion to help homeowners escape foreclosure; $5 billion for emergency public housing vouchers; and $5 billion to counter homelessness.

EndNote

The new ARP act is an important act for the US. Due to COVID, there were many financial strains on people because there was an increase in job losses. Such an act will help people recover their health insurance and reduce their health insurance costs. Healthcare is costly in the US, and the majority of the population is unable to afford it. The new act aims to reduce the premium for health insurance so that many people can afford it. 

As a result of the above act, many insurance companies who offer healthcare insurance will change their policies and adjust according to the act. If you’re someone who’s in search of an affordable health insurance plan, get a free quote from NewMedicare.