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You Can Now Get Free Or Low-Cost Health Insurance If You Collect Unemployment at Any Point in 2021

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  • The subsidies that are now available through the Affordable Care Act marketplace were authorized in the $1.9 trillion American Rescue Plan Act, which was enacted in March.
  • Anyone who has received unemployment benefits this year could qualify for the free (or nearly free) coverage, even if they are working again.
  • The current special enrollment period ends Aug. 15.

Anyone who is receiving — or already received — unemployment benefits in 2021 could discover they now qualify for no-cost or low-cost private health insurance.

As of Thursday, zero-premium health plans that come with minimal or no cost-sharing — i.e., deductibles and copays — are available through the Affordable Care Act marketplace to individuals collecting unemployment at any point this year. The financial help was authorized in the $1.9 trillion American Rescue Plan Act, which was signed into law in March by President Joe Biden.

"People who have been unemployed at any point this year essentially can get very generous or free health coverage," said Cynthia Cox, a vice president at the Kaiser Family Foundation and director of its Affordable Care Act program. 

Already, other provisions in the American Rescue Plan affecting the marketplace have taken effect, including an expansion of ACA subsidies and who qualifies for them in 2021 and 2022.

Before that expansion, the aid was generally available to households with income from 100% to 400% of the poverty level. The cap is eliminated through next year, and the amount that anyone pays in premiums will be limited to 8.5% of their income as calculated by the exchange.

Additionally, a special enrollment period for marketplace coverage, created through a presidential executive order, opened in February and is scheduled to close Aug. 15. As of early June, more than 1 million individuals had enrolled during the period, according to CMS.

Total enrollment in marketplace plans is about 12 million, according to the Kaiser Family Foundation. At least 10.9 million uninsured individuals would qualify for subsidies in some form.

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Overall, about 3 out of 5 eligible uninsured Americans should be able to access zero-premium plans, according to the Centers for Medicare & Medicaid Services. That includes those who would qualify under the unemployment provision.

"Even if you were unemployed earlier this year but have gained employment, if you still have no coverage, you can get it now," Cox said. "You'd just have to demonstrate you were deemed eligible for unemployment benefits."

There is no income test to take advantage of this benefit, she said. Be aware, however, that you generally cannot qualify for any subsidies through the ACA marketplace if you can get health coverage through your employer.

"Generally speaking, [enrollees] are people who can't get insurance any other way — not through their work or their spouse's work or through Medicare or Medicaid," Cox said.

If you're new to the marketplace and think you would qualify for the unemployment subsidies, the best place to start is healthcare.gov. Once you plug in your information and the subsidies are applied, you generally should see at least a couple free "silver" plans, Cox said.

"That's where you get the premium help, and also additional help with [cost-sharing]," Cox said. "And the deductible is so low that it's more like a 'platinum plan,' which is the best you can get."

Separately, anyone who's getting coverage under the Consolidated Omnibus Budget Reconciliation Act  — the law that lets you stay on your employer's plan when you leave your company — may want to see if switching to coverage through the marketplace would make sense.

COBRA coverage typically is expensive because you are responsible for the full premium instead of your employer chipping in. However, the federal government is picking up the tab for COBRA payments through September, per the American Rescue Plan.

When that runs out, you would need to either pay the full monthly premium or find alternative coverage.

"They might want to see if it makes sense to switch to the exchange before then," Cox said.

The low-cost silver plans cover about 94% of a person's costs, Cox said, compared with 85% of employer plans.

If you qualify for Medicaid, healthcare.gov should also indicate that. Roughly 80 million people were enrolled in Medicaid or the Children's Health Insurance Program as of January, according to government data. That's about 10 million more than pre-pandemic.

The Biden administration has also proposed extending the annual open enrollment for the ACA marketplace. Instead of running from Nov. 1 to Dec. 15 as it has in recent years, it would remain open until mid-January, under the proposal.

Additionally, the administration has proposed allowing year-round marketplace enrollment for households with up to 150% of the poverty level.

"For now, though, people should act when there is an enrollment opportunity," Cox said.

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