President Joe Biden’s American Families Plan could help more than 100,000 Alabama families afford health care coverage, but the cost of the ambitious proposal could make it a hard sell in a divided U.S. Congress.
Biden’s team released detailed facts sheets for each state early Thursday after unveiling the plan in the eve of his 100th day in office. Changes to the Affordable Care Act would enable up to 58,000 Alabamians to get health insurance coverage, according to that breakdown. Another 97,000 would save hundreds of dollars on premiums every year.
The plan would also provide paid leave for families after birth or adoption or to handle family and medical emergencies. Other elements include funding for early childhood education, community college and tax credits.
Biden said the plan would be funded by taxes on investors and high-income Americans. Conservative members of Congress, including those from Alabama, are opposed to the plan.
“The ‘American Families Plan’ is not about helping American families, it is about redefining what it means to be an American family – allowing for big government to infiltrate Alabamians’ homes and daily lives,” said Republican U.S. Sen. Tommy Tuberville, according to WSFA.
About one in 10 people in Alabama lack health insurance. It is one of twelve states that haven’t expanded Medicaid to adults earning $17,000 a year or less. Alabama’s Medicaid program doesn’t cover adults without children and only covers caregivers who earn less than $4,000 a year, the country’s second lowest eligibility limit.
Black Alabamians are less likely than whites to have health insurance. Coverage rates increased after the passage of the Affordable Care Act, but began to fall again during the presidency of Donald Trump.
Biden has made moves to strengthen the Affordable Care Act during his first few months in office. He created a special open enrollment period designed for those who lost jobs during the pandemic.
The American Rescue Plan opened eligibility for subsidies to make health insurance more affordable. It also made some plans less expensive, and even free, for people with low incomes. It also included incentives for states like Alabama that have not expanded Medicaid that would reduce its share of the cost from 10 percent to 5 percent. So far, Alabama officials have not opted to expand and take advantage of the extra funding.
The COVID pandemic has exposed health care inequities in places like Alabama. Although testing and treatment for the virus itself was covered by insurance and federal funds, many of those most at risk for hospitalization and death had underlying conditions and inadequate access to health care.
The plan would not provide all Alabama residents with health coverage if state leaders don’t expand Medicaid. But the new provisions would help families find affordable coverage. The Biden plans reduce the amount families spend on health insurance from 0 to 8.5 percent for at least two years.
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You Could Pay Less for Health Insurance if You Enroll Through Marketplace Now
When the American Rescue Plan Act passed Congress in March 2021, it got a lot of attention because of its third round of pandemic stimulus funds. But, like lots of legislation, it was packed with pages (and pages) of other provisions, including the possibility of lowering your health insurance premiums.
If there’s anything that can be as mind-numbingly frustrating as figuring out what is in a 628-page Congressional bill, it’s shopping for health insurance. It’s worth digging in on this, though, because it could be real money in your pocket.
The extra cash comes from subsidies on premiums that are available when you purchase health insurance through federal and state-run health insurance marketplaces, such as on HealthCare.gov. Part of the Affordable Care Act (ACA), the idea of the Marketplace is to make health insurance available to anyone, rather than relying on policies through an employer. So if you lost a job during the pandemic or started your own business, it’s one option to buy coverage.Who is eligible?
Anyone can purchase through the Marketplace, regardless of income or employment status. In addition, subsidies are available for those who qualify based on their income. And in the American Rescue Plan Act, those subsidies increased: People who have income of up to over 600 percent of poverty level may be eligible for a subsidy as of April 2021. Plus, the amount of the subsidy for those who were already eligible increased. (For a family of four in 2021, 600 percent of the federal poverty level is $157,200.) An analysis from KFF found that the number of people eligible for subsidies increased from 18.1 million to 21.8 million.
If you had investigated Marketplace subsidies in the past and found you weren’t eligible, or the amount of the subsidy was insignificant, it is worth checking again. You have until August 15, 2021 to enroll. That’s another part of the American Rescue Plan Act, says Eric Jans, an independent insurance agent in Nashville who works with clients in more than 15 states. Usually, you can only enroll in October through December, unless you have a “qualifying event,” like losing your job, moving to a new county, or getting married. But now, anyone can enroll this spring and summer.
When you apply, you enter what you think your Adjusted Gross Income (AGI) will be for 2021. For some people, that’s easy. For the self-employed and gig workers, that can be trickier. But, Jans says, you can always go in and adjust when you have more updated information.How do I sign up?
You can log on to HealthCare.gov and compare plans for yourself. While you might think the Bronze plans will be the cheapest, Jans says the Silver plans tend to be the ones that are the best deals for folks who qualify for subsidies.
If you sign up for a plan with a lower premium, Jans says you may end up with a credit on your tax return as the subsidy for first months of the year will be retroactive. For example, if you were paying $600 per month in January through April, and now find that your monthly premium is $475 per month starting in May, you may have $500 in a tax credit ($125 per month for four months).You can always outsource
If you find this confusing, don’t be hard on yourself: It is. Consider having an independent agent do the checking for you. The health insurance companies pay the agents’ commission, so it won’t cost you anything. A good agent will ask you questions about what’s most important to you—be it lowering your premium, keeping your current doctors, or having certain prescriptions covered—and then will make recommendations for the right plans for you.
Because this provision hasn’t gotten a lot of attention, Jans has been reaching out to his client list, asking them if they want him to check new rates for them. He had one couple who makes $120,000 annually who initially said no, because they hadn’t qualified before. Then, they decided to have Jans run the numbers—and their premiums dropped by $1,000 per month. Yours could, too.
This Health Insurance Freebie Is Disappearing Fast
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A widely available health insurance freebie is starting to disappear.
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During the past year, health insurance companies typically have waived deductibles, co-payments and other costs for treatment and doctor and hospital visits related to COVID-19, the disease caused by the coronavirus.
Last November, a study found that 88% of people covered by insurance plans had policies that waived payments related to COVID-19 treatment at some point during the pandemic.
But late last year, health insurers began rolling back those perks, and the trend has picked up steam in 2021, according to a Kaiser Health News report.
For example, KHN reports that:UnitedHealth started to roll back COVID-19 waivers last fall and completed the process in March.Anthem stopped providing COVID-19 waivers at the end of January.Aetna ended deductible-free inpatient treatment for COVID-19 on Feb. 28.
Fortunately, some services still are gratis. For example, you do not have to pay for COVID-19 vaccinations or more COVID-19 tests, as federal law mandates that insurers must waive these costs.
Ironically, last year’s widespread policy of waiving the cost of COVID-19 care could actually end up hurting the pocketbooks of many consumers who pay for health insurance.
KHN points out that as part of the Affordable Care Act of 2010, insurers must spend at least 80% — and for large group plans, 85% — of their premium revenue on direct health care, rather than on marketing and administration.
Insurance companies that do not meet this requirement must issue rebates by Aug. 1 to individuals or employers who purchase coverage.
Waiving the fees associated with COVID-19 care boosted insurance company spending, which may have “offset some share of what are expected to be hefty rebates this summer,” KHN reports.
So, for some consumers, the widespread trend among insurance companies of waiving costs related to COVID-19 care might turn out to be a net financial negative.
As Cynthia Cox, a vice president at the nonprofit Kaiser Family Foundation and director for its program on the Affordable Care Act, told KHN:
“If they completely offset the rebates through waiving cost sharing, then it strictly benefits only those with COVID who needed significant treatment. But, if they issue rebates, there’s more broad distribution.”How to save more on health care
Looking for more ways to cut your health care costs? Consider opening a health savings account.
There are few tax breaks as generous as an HSA. You can take a deduction for your contributions, the money grows tax-free, and you won’t owe taxes when you withdraw it if you spend it on qualified medical expenses.
In short, you will never owe taxes on this money in most cases.
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To be eligible for an HSA, you must have a high-deductible health insurance plan and otherwise qualify.
You will also have to choose an HSA provider, such as Money Talks News partner Lively. MTN contributor Miranda Marquit talks about her experience with Lively in “3 Ways a Health Savings Account Can Improve Your Finances.” Sponsored: How to find cheaper car insurance in minutes
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