How Biden’s stimulus checks bill can cut your health insurance costs

There’s a lot more to President Joe Biden’s $1.9 trillion relief package than the long-awaited $1,400 stimulus checks.

The massive bill, which has taken another big step forward in Congress, also contains extended federal unemployment benefits, more funding for vaccines and — maybe most important for a country still mired in a pandemic — new subsidies to cut the cost of health insurance.

The Senate passed the bill on Saturday and is punting it back to the House for final approval and delivery to Biden, possibly in the coming week.

So, along with a $1,400, stimulus check that you can use to pay down debt or cover household expenses, you’ll soon be able to take advantage of relief measures that could save you thousands on an Obamacare plan.

How the bill will slash insurance premiums

Doctor's working on laptop computer with stethoscope in the foreground

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Tucked into the relief bill is a provision that will not only temporarily lower the cost of health insurance but also potentially expand coverage to more than 1 million Americans.

So if you plan to shop around for health insurance during the current special Affordable Care Act (ACA) enrollment period, which runs till mid-May, you may soon be able to benefit from discounted rates.

Under the bill, people not covered through employer-sponsored health insurance or a government plan, like Medicare of Medicaid, will have their Obamacare marketplace premiums capped at 8.5{98cae0078f524eff3ab8ec32cf55b261677ef6c8a6ed6e94d92a4234b93f46b6} of their income for the next two years.

The legislation makes those subsidies available to people who are earning more than four times the federal poverty rate, which is approximately $51,520 for single people and $106,000 for a family of four.

What that looks like for a real person

Elderly couple, sitting with doctor, holding hands while doctor writes on clipboard

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The group coming out best from these augmented subsidies would be adults ages 55 to 64, who account for a significant percentage of uninsured Americans but tend to use more health care services than their younger counterparts, according to analysis from the Kaiser Family Foundation.

For example, under the proposed changes, a 64-year-old woman with a $58,000 income would see her premiums reduced from $12,900 to $4,950, according to the nonpartisan Congressional Budget Office (CBO). That’s a 61{98cae0078f524eff3ab8ec32cf55b261677ef6c8a6ed6e94d92a4234b93f46b6} savings.

The CBO says an estimated 1.3 million more people will receive coverage through this proposal.

But because these measures are temporary, ACA premiums could jump back up on Jan. 1, 2023, unless Congress moves to make these enhancements permanent.

How it will impact Medicaid in certain states

modern hospital style building

Spiroview Inc / Shutterstock

As of this month, there are still 12 states that haven’t adopted the Affordable Care Act’s provision to expand Medicaid eligibility, leaving about 9 million people without an affordable health insurance plan and 2 million uninsured.

The COVID relief bill would increase pressure on those states by covering 95{98cae0078f524eff3ab8ec32cf55b261677ef6c8a6ed6e94d92a4234b93f46b6} of the Medicaid expansion costs — up from the 90{98cae0078f524eff3ab8ec32cf55b261677ef6c8a6ed6e94d92a4234b93f46b6} the federal government now offers as an incentive.

That means those states, if they choose to go along with Medicaid expansion, would temporarily receive more federal funding to expand the program than it would cost them to roll it out.

Finding room in your budget right now

Close up of african American man calculating using machine managing household finances at home, focused biracial male make calculations on calculator paying bills, account taxes or expenses

fizkes / Shutterstock

If you can’t wait for the legislation to pass to find a more affordable health insurance plan, start shopping around now for a policy that meets your budget and coverage needs.

And, if you’re currently being crushed by debt because of high health insurance and medical costs, you may want to consider folding your loans into a single, lower interest loan to give yourself some breathing room and get out from under your debt sooner.

Finally, why stop with just your health insurance?

By shopping around for the cheapest policies, you could potentially cut car insurance costs by more than $1,000 and knock down your homeowners insurance bill by hundreds as well.

Who knows — with all these savings under your belt, your blood pressure may start going down on its own.

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