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Need Health Insurance? A Guide to New Options Under the Stimulus.

The stimulus package signed by President Biden on Thursday provides new options for Americans who need health insurance — and new resources to help lower costs for those who are already insured.

Few of these changes apply to Americans who get insurance at work or through Medicare. But if you buy your own insurance, have been uninsured, or have recently lost job-based coverage because of a layoff, the bill introduces new programs and new funding to help you get and stay covered. The new programs are temporary — none last longer than two years.

The array of programs can be complicated and tough to navigate, and some will take a little time to update. Here is some guidance.

The stimulus bill provides substantial, short-term subsidies to buy coverage on the Obamacare marketplaces. Regardless of your income, if you collect unemployment insurance at any time this year, you will qualify for a free silver plan with special bonus coverage that will lower your deductible and co-payments.

It may take a little time for Healthcare.gov or your state exchange website to update. But if you sign up for a silver plan now, you will be able to get these benefits for the rest of the year. You may need to pay a higher premium at first while the system is adjusting, but you will eventually be eligible for a refund.

If you used to get insurance at work, you may also qualify for up to six months of free COBRA coverage, meaning you have a choice about which kind of free insurance you want.

Under federal law, you can stay enrolled in your workplace coverage for up to 18 months after losing your job-based insurance. Normally, you would need to pay the full price of this insurance, which can be expensive. But under the new stimulus bill, you can qualify for up to six months of free COBRA coverage, if you lost your coverage in the last year. You can also qualify for the free COBRA if you still have your job but your hours have been cut and you lost your insurance as a result.

After Sept. 30, though, you will need to pay to keep the COBRA plan, or you will need to switch to a different option.

The legislation introduces additional subsidies meant to lower the amount most people pay for insurance purchased on Affordable Care Act marketplaces. These extra subsidies will be retroactive to Jan. 1. The details of how you will get this new discount are still unclear: Your premium amount may reset automatically to a lower price, or you may need to go back to Healthcare.gov or your state marketplace to request the discount once the new system is set up. In the District of Columbia, one of the first places to announce a policy, prices will adjust automatically in April. Regardless, once those policies are completed, there will be a way to get a refund for any overpayments you make.

To get an approximate sense of how much your premiums will decrease, these maps may be helpful. To know your new premium more precisely, try the Kaiser Family Foundation’s online calculator, available here.

The stimulus package funds these extra subsidies for two years. Any extension after 2022 will require new legislation.

If you already have Obamacare coverage, but you have received unemployment insurance any time this year, you now qualify for additional assistance. You should go back to the marketplace to make sure you are signed up for that extra benefit once it is set up.

Normally, you can buy insurance only during a six-week period each fall. But the Biden administration established a special enrollment period that runs through mid-May, and most state marketplaces have done the same. This means you can go to Healthcare.gov and sign up for insurance now.

Because of the stimulus bill, the tax credits that help you buy insurance will be higher than ever before — enough to pay for a free silver plan for someone with an annual income of around $19,000, or to lower premiums by as much as $1,000 a month for someone earning around $60,000 in an expensive market. If you go to Healthcare.gov today, you won’t see those new prices, but you will still qualify. If you want coverage right away, you will eventually qualify for a refund if you pay too much at first.

The changes in premiums affect nearly everyone, but are particularly valuable for two groups. If you have a low income, subsidies will cover enough to give you a free silver plan with extra benefits that lower your co-payments and deductibles. And if you earn more than 400 percent of the federal poverty level — about $51,000 for a single person or $105,000 for a family of four — for the first time you will qualify for help buying insurance.

Frequently Asked Questions About the New Stimulus Package

The stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more.

Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read more

This credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.

There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.

The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.

These changes were devised to make insurance more affordable for people who have found premiums out of reach. To get a sense of what you will need to pay, the Kaiser calculator may be helpful while the government sites update.

In most — but not all — states, simply having a low income can qualify you for Medicaid coverage. Medicaid generally charges no premiums and has very low co-payments for doctor visits or prescriptions. In the states shown below, you can qualify by having an income that is lower than around $1,400 monthly for a single person or $2,950 for a family of four.

Missouri and Oklahoma are in the process of expanding Medicaid, so people there may also become eligible later this year. The stimulus bill provides a financial incentive for other states to expand their programs, too. So far, it is unclear whether any of them will take advantage of the offer.

In the states that haven’t expanded, you may also qualify for Medicaid if you are poor and fall into some other category, such as being the parent of a young child. If you think you could qualify for Medicaid, it is worth applying to find out.

Eligibility for Medicaid will endure even after stimulus provisions expire.

The changes under the stimulus bill make it worth considering a switch in insurance type.

Many Americans with higher incomes bought their insurance outside the state marketplaces because they didn’t qualify for subsidies. The new legislation changes that: Higher-income people can now get financial help buying insurance, but only if they sign up for a marketplace plan.

Obamacare plans cover a broader array of benefits than short-term plans or health-sharing ministries do, and they can’t deny your claims based on a pre-existing condition.

Whether switching is a good decision for you depends on how much you’ll save in premiums and how much you’ve already paid in deductibles. But switching will pay off for enough people that “they should absolutely come in and just see what the prices are,” said Sabrina Corlette, a co-director at the Center on Health Insurance Reforms at Georgetown University. Ms. Corlette notes that this is especially true for older people; new subsidies could cut their cost of insurance by more than half.

Here are answers to other frequently asked questions about the stimulus package.


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