U-M Health: Buying Your Own Health Insurance Just Got a Lot Less Expensive

Last month, hundreds of millions of Americans got a cash infusion from the government as part of the American Rescue Plan.

But starting this month, another part of that law could have an even bigger effect on the wallets of tens of millions of Americans.

That’s because starting April 1, the law makes health insurance much less expensive for people who don’t get it from their job, Medicare, Medicaid, or military and veterans programs.

The program, which will last through 2022, increases the financial help that’s available to people who buy their own insurance through the national Marketplace at Healthcare.gov.

That includes both people who already bought a plan for this year, and people who don’t have insurance right now.

That means the monthly premium for a particular plan will be lower than before – for many people, much, much lower. Or, you might be able to get an even better insurance plan for what a lower-level one used to cost.

And that’s on top of the fact that having health insurance can save you hundreds or thousands of dollars if you get sick or injured.

The Open Enrollment period for anyone who wants to take change or choose their plan through Healthcare.gov for this year runs through August 15. Changes to cost and coverage take effect soon after approval. You will still have to pay any co-pays, co-insurance and deductibles that a plan has.

After August, people who have a major life event – losing a job, getting married or divorced, having a baby – can still enroll for the rest of this year. And a new Open Enrollment for coverage in 2022 will open on the Marketplace on November 1.

“We’re already getting patients calling to get help with finding a plan or switching what they have,” says Alena Hill, who oversees a team of financial counselors at Michigan Medicine who are trained to help anyone find a plan that works for them. “The game has changed, for the better. Now is the time to make sure you’re covered, and so are the people you love.”

Hill’s team can help anyone who calls (877) 326-9155 on Monday-Friday, from 8 a.m. to 4 p.m., or emails PFC-Counselors@med.umich.edu.

Here’s how the new program could affect different people:

If you already bought health insurance on Healthcare.gov:

To get their costs reduced, everyone who already bought their own coverage on the Marketplace needs to go back to Healthcare.gov and confirm their choice, or make a new one.

This includes people who chose a plan last fall during the regular Open Enrollment, or continued their coverage from a previous year.

It even includes people who bought insurance recently under the special enrollment period that began in February. The new program that took effect April 1 won’t automatically update their monthly cost.

SEE ALSO: A Double Dose of Good News on Health Insurance

In order to find out how much your plan will now cost, or what you might pay if you pick a different plan, you need to go back to Healthcare.gov and choose the “report a life change” option. Then, click “change to my household’s income,” and enter the information it asks for, even if your income hasn’t actually changed.

Then, submit your application, and go into the Plan Compare section of the site – you can either confirm that you want the same plan you’re already in, or choose a new one.

Keep in mind, though, that if you have a deductible on your existing plan and you’ve already met part of it this year, you’ll be starting from scratch with a new plan.

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Also, check to see if any doctors, hospitals and health systems that you prefer to go to actually participate in the new plan, before you finalize your choice.

After you’ve submitted your choice, you’ll get a notice of how much financial assistance you now qualify for, and instructions on what to do to make your choice final. Your monthly cost could change as soon as the first of the next month.

If you choose a new plan, make sure you understand what costs you’ll have to pay when you use your insurance, including co-pays, co-insurance and deductibles.

If you looked at Healthcare.gov before, but didn’t buy a plan because it seemed too expensive:

The new law opens up financial help to millions more people, so you should go on Healthcare.gov and shop again right away.

People who make just a bit more than the poverty level – about $19,000 for an individual and $39,000 for a family of four – will now have access to some plans for little or no monthly premium.

People making less than this can also get low-cost coverage if they live in Michigan or one of the other states that have expanded Medicaid. The Healthcare.gov calculator will tell them if they might qualify and direct them to their state’s program. If they get rejected by their state plan, they can take that rejection letter back to Healthcare.gov and apply to get a plan.

People with higher incomes – more than four times the poverty rate – didn’t qualify for financial help before, but the new law changes that.

Now, anyone making up to six times the poverty level can get help. That includes individuals with incomes up to $76,000 and families with incomes up to $157,000. The older you are, up to age 64, the more financial help you will get.

Whatever plan you choose, make sure the monthly cost is something you’ll be able to afford, and set aside that amount each month before your other expenses. If you miss a couple of payments, the insurance company could drop you.

And if you choose a plan that has a high deductible, you can set money aside tax-free in a health savings account that rolls over from year to year.

If your income varies from month to month, making it hard to fill out the part of the application that asks you to state your yearly income, do a best-guess estimate. You can go back and update it later if your income goes up or down. If your income ends up being much higher than you put on your application, you may end up owing money, or getting a smaller refund, when you file your income taxes next year.

SEE ALSO: Pandemic Hitting You in the Wallet? How to Find Health Coverage or Low-Cost Medical Help

If you have the chance to get health insurance through a job, but the cost of that coverage would eat up more than 8.5% of your income, you can also get financial help with buying coverage on healthcare.gov.

If you’ve received unemployment benefits any time in 2021, a special program will go into effect this summer that could reduce the cost of buying health insurance on Healthcare.gov even more. Don’t wait to enroll – pick a plan now, and set a reminder to go back and apply for the additional help in July.

If you lost job-related health insurance recently, or you lose it this summer:

The program called COBRA allows people who have lost a job, or had their hours cut so that they no longer qualify for their employer’s plan, to keep buying the health insurance they used to have. Employers with more than 20 employees must offer it.

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But usually, COBRA is too expensive for many people, and is only a good option if they absolutely need to keep going with a particular kind of treatment or have a particular specialty doctor.

The new law makes COBRA premiums largely free to individuals through September 30, thanks to a federal subsidy that will pay the employer for the cost of the premium.

Even if you didn’t take the COBRA option when you lost a job or had your hours cut, or you took it but then dropped it, you can still enroll. If you lose your job or have your hours cut before September of this year, you can still enroll.

Employers are supposed to reach out to anyone who may qualify for this new program. But you may want to contact the human resources person or office and ask them how to enroll now that the new help is available.

If you don’t have health insurance and you’ve never shopped for health insurance before:

The new reductions in cost mean this is a perfect time to go on Healthcare.gov and see what your options are, and how much it will cost.

Health insurance language can be confusing and the choices may seem overwhelming. If you need help, ask for it – use the Local Help finder on Healthcare.gov, or call the number above.

If you’ve been receiving free or reduced-cost services from a hospital because you didn’t have insurance, contact the office that has approved this assistance. They may request or require that you apply for insurance now, so that the hospital does not have to bear the entire cost of your care.

If your income is below the poverty level who lives in a state that hasn’t expanded Medicaid, the plans on the Healthcare.gov site are not open to you. However, there may be emergency help available if you contact a local health center or nonprofit organization.

Immigration status can affect eligibility for Healthcare.gov plans, too. Learn more about which kinds of immigration status make someone eligible to apply for coverage on healthcare.gov. Contact the Washtenaw Health Plan at (734) 544-3030 or whp@washtenaw.org, or your local Federally Qualified Health Center, for help in understanding how this might affect you or someone you know.