The American Rescue Plan Act and ObamaCare
How the American Rescue Plan Impacts the ACA
The American Rescue Plan Act increased and expanded cost assistance under the Affordable Care Act (ObamaCare).
The Rescue Plan Act included repayment relief for 2020, $0 premiums and lower deductibles for those making up to 150% FPL from 2021-2022, and tax credits for those making up to 400% FPL for 2021-2022.[cite]The American Rescue plan Act. Congress.gov.[/cite][cite]How the American Rescue Plan Act Affects Subsidies for Marketplace Shoppers and People Who Are Uninsured. KFF.Org.[/cite][cite]How the American Rescue Plan Will Improve Affordability of Private Health Coverage. KFF.Org.[/cite][cite]Impact of Key Provisions of the American Rescue Plan Act of 2021 COVID-19 Relief on Marketplace Premiums. KFF.Org.[/cite]
NOTE: Many provisions were extended by the Inflation Reduction Act. For example, the subsidy cliff removal is extended through 2025.
NOTE: While some of the items listed below end in 2022, other items were extended (and relief may be extended at the state level). Extended federal relief includes a permanent extension of Open enrollment from Dec 15 to Jan 15 each year, plus extended subsidies until 2025 via the Inflation Reduction Act.
Under the American Rescue Plan Act, for 2021 – 2022:
- People under 100% FPL who are not eligible for Medicaid expansion and are on unemployment can get marketplace subsidies (i.e. the Medicaid gap is closed for those on unemployment),
- People up to 150% FPL can get silver plans for $0 premiums and reduced deductibles,
- People over 400% FPL can get assistance (premiums capped at 8.5% of income; i.e. the subsidy cliff is removed),
- and everyone with Marketplace assistance gets increased assistance.
NOTE: This act impacts tax credit repayment limits. For one, there is a repayment holiday for the 2020 tax year. Also, for 2021 – 2022, especially for those who end up making over 400% FPL after taking credits earlier in the year, there is relief. Previously making over 400% FPL meant owing back all tax credits due to not being eligible for credits. Now that those making over 400% FPL are eligible for subsidies, and going over the 400% “cliff” will no longer mean paying everything back.
NOTE: The Act also includes a tax holiday for tax credit repayment for 2020, temporary COBRA premium subsidies, and more. For more on what the Act includes, see the citations below.
Changes to Tax Credit Caps 2021-2022 Under the American Rescue Plan Act
|Table 1: Percent of Income Paid for Marketplace Benchmark Silver Premium, by Income|
|Income (% of poverty)||Affordable Care Act
(before legislative change)
|COVID-19 Relief (current law 2021-2022)|
|Under 100%||Not eligible for subsidies*||Not eligible for subsidies**|
|100% – 138%||2.07%||0.0%|
|138% – 150%||3.10% – 4.14%||0.0%|
|150% – 200%||4.14% – 6.52%||0.0% – 2.0%|
|200% – 250%||6.52% – 8.33%||2.0% – 4.0%|
|250% – 300%||8.33% – 9.83%||4.0% – 6.0%|
|300% – 400%||9.83%||6.0% – 8.5%|
|Over 400%||Not eligible for subsidies||8.5%|
|NOTES: *Lawfully present immigrants whose household incomes are below 100% FPL and are not otherwise eligible for Medicaid are eligible for tax subsidies through the Marketplace if they meet all other eligibility requirements.
**In the COVID-19 relief law, lawfully present immigrants in states that have not expanded Medicaid would continue to be eligible for marketplace subsidies. In addition, people receiving Unemployment Insurance (UI) are treated as though their income is no more than 133% of poverty for the purposes of the premium tax credit. This could extend premium tax credits to some individuals with incomes below poverty.