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If you buy your health insurance through the Government Health Insurance Marketplace, you should be prepared for higher premiums next year.
Unless Congress does something, the increased premium subsidies (technically tax credits) for 2021 and 2022 will disappear after this year. The change will affect 13 million of the 14.5 million people who purchase health insurance through the federal or state marketplace.
“By default, the expanded grants expire at the end of this year,” said Cynthia Cox, vice president of the Kaiser Family Foundation and director of the Affordable Care Act program. “On average, premiums will increase by more than 50%, but for some they will be higher.”
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Most insured persons – including the self-employed and employees without occupational health insurance – receive grants that reduce the contributions they pay. Some people may be eligible for cost-sharing help, such as deductibles and co-payments on certain plans, based on their income.
Before the temporary change in subsidy eligibility calculations, support was typically granted only to households whose income was between 100% and 400% of the poverty line.
The American Rescue Plan Act, which went into effect in March 2021, removed — for two years — that income cap and the amount everyone pays for bonuses during payout, as calculated by the exchange. Accordingly, their income is limited to 8.5%.
Assuming Congress doesn’t renew the expanded tax credit, only those with household incomes between 100% and 400% of the federal poverty line would qualify for the subsidy again.
How much premium growth a person will see depends on income, age, premium costs, where they live, and how insurers’ premiums will trend for the next year, Kaiser says.
Here’s a hypothetical example, just for illustration, based on a report from the Congressional Budget Office: Let’s say a 64-year-old with an income of $58,000 – about 430% of the poverty line of $13,590 in 2022 – exchange through insurance. The current limit of 8.5% means they won’t be paying more than $4,950 in bonuses this year. However, if the 400% eligibility threshold is reached in 2023, the same individual will pay $12,900 in awards because they will no longer be eligible for the grant.
A proposal to extend additional subsidies through 2025 was included in the Democrats’ Build Back Better bill, which was approved by the House of Representatives last year but fell apart in the Senate.
It’s uncertain if the provision will be revived in any form by other legislation Democrats may try to push through the Senate before a new Congress begins in January — the composition of which could look very different due to the midterm elections. Is. 8th.