Kathy Springston wasn’t sure she had heard correctly when Carla Torres-Barrera quoted her a new price for health insurance.
Instead of paying almost $440 a month, Springston will pay about $291 a month for the same insurance she has now through the federally run insurance marketplace established under the Affordable Care Act, a savings of $149 a month.
“I had to ask her, ‘Is this right?’” she said.
By the time she turns 65 and qualifies for Medicare next fall, Springston estimates she will save $745 in insurance premium costs. She plans to invest the money in acupuncture or other ways to address her sciatica condition that aren’t covered by traditional insurance.
“It’s a good way to put the money back into my health,” said Springston, a resident of Richmond’s Fan District whose husband, former Richmond Times-Dispatch reporter Rex Springston, already is covered by the national Medicare program.
Virginians are just beginning to realize how much they may be able to save on their health insurance under the American Rescue Plan Act, a $1.9 trillion emergency relief package that President Joe Biden signed into law on March 11.
For the next two years, the law makes insurance coverage free or close to it for people with low incomes. It also removes a cap on federal subsidies for people who earn more than 400% of the federal poverty level, or $51,520 a year for an individual. It offers temporary opportunities for people who have lost their jobs or received unemployment relief during the COVID-19 pandemic to get health coverage at no cost.
“The changes in the federal marketplace are really huge,” said Jill Hanken, a senior lawyer at the Virginia Poverty Law Center who is director of the ENROLL Virginia! initiative to help people navigate a complex marketplace for affordable health insurance.
“It’s amazing how much of a difference this makes for people in terms of their health insurance,” Hanken said.
One of the most consequential changes in the law is the removal of an income cap in the Affordable Care Act that has made health insurance unaffordable for thousands of Virginians who earn too much for federal subsidies in the marketplace but can’t pay eye-popping premiums in the private market for people who aren’t part of group plans. The law would allow subsidies to ensure that people pay no more than 8.5% of their income on health insurance premiums.
“It will give us another opportunity to take a big bite out of the number of people who still don’t have health care coverage,” said Sen. George Barker, D-Fairfax, a former health care planner who is a leader on health insurance issues as a senior member of the Senate Finance & Appropriations Committee.
Many are eligible
However, many Virginians with higher incomes — from 400% to 600% of the poverty level, or up to $77,220 for an individual — are unaware they could qualify for subsidies to make health insurance affordable on the federal marketplace, said Torres-Barrera, a health care navigator and team coordinator for ENROLL Virginia! at the Central Virginia Legal Aid Society in Richmond.
“They really don’t know,” she said. “They think they cannot afford it. There are many self-employed people who don’t know.”
Torres-Barrera has made it her mission to tell people how they could benefit from the changes under the law, including Springston and dozens of other clients who were able to submit new applications for coverage at a lower monthly cost.
“Every single appointment has been a joy,” she said. “People have been so happy about their savings.”
‘What a difference!’
Thomas Keys hadn’t had health insurance for 10 years, when his cardiologist advised him last year that he should get health coverage.
A retired real estate agent and contractor who lives in Henrico County on the north side of Richmond, Keys is living on his Social Security income, so he was happy to learn from Torres-Barrera that the cost of his existing Cigna policy would fall from $70 a month to $5.88.
“What a difference!” he said. “I told everybody I know.”
Julie LeBlanc is unable to work temporarily because of health problems after moving her mother to Richmond from Los Angeles and settling her in a long-term care facility here.
Now living in South Richmond, LeBlanc obtained insurance coverage last year through the federal marketplace to cover her medical expenses. The deductible was high, but she said, “I have a lot of health issues.”
Last week, Torres-Barrera called “out of the blue” and suggested that LeBlanc resubmit her application to the marketplace. The result? Her monthly premium fell from $339 to $209 a month, a monthly savings of $120.
“I feel for people who don’t have support,” she said.
The Kaiser Family Foundation estimates that the new law will expand health coverage to 3.7 million uninsured Americans, an increase of 20%. The estimated average savings range from $33 a month for someone who earns less than 150% of the poverty level ($19,320 for an individual), to $213 a month for someone with an income between 400% and 600% of poverty, or up to $77,220 a year. The savings would be significantly higher for families.
“It definitely provides a substantial subsidy to those who have had trouble affording it,” said Doug Gray, executive director of the Virginia Association of Health Plans.
The American Rescue Plan Act also gives consumers plenty of opportunity to apply for coverage on the marketplace, either for the first time or to update plans. Biden already had pushed the enrollment deadline for health plans on the marketplace from Feb. 15 to May 15, but the government has extended the deadline another three months to Aug. 15.
Interest in marketplace coverage already is rising. The Centers for Medicare & Medicaid Services said last week that 528,000 Americans have enrolled in marketplace coverage this year, including more than 322,000 in March alone. In Virginia, 14,859 people enrolled in coverage on the marketplace between Feb. 15 and March 31, an increase of 8,901 from the same period a year earlier, or 149%.
The law also extends temporary aid to people who have lost their jobs by covering the full cost of insurance under the federal COBRA law, even if they initially declined it because of the price, through Sept. 30, the end of the federal fiscal year.
“They’re basically making it a rescue provision,” said Doug Gray, executive director of the Virginia Association of Health Plans. “It’s a great way to help people get on their feet.”
The law also will allow people who have received unemployment benefits this year to qualify for a benchmark insurance plan for no premium and lower out-of-pocket costs, but only for 2021. “They are the ones who are going to benefit the most,” Torres-Barrera said.
Public policy-makers and advocates say the law doesn’t solve long-term challenges in obtaining affordable health insurance coverage, but, Torres-Barrera said, “I just hope this brings permanent change to society.”
“We can’t go back to where we were.”