The American Rescue Plan Blog – How Does The American Rescue Plan Impact Health Insurance And Does It Mean Anything To Me?

The answer is, it depends…..

If you are currently on Medicare, this information does not apply to you.


The American Rescue Plan (2021 Federal Stimulus Package) was signed by President Biden on March 11, 2021, to help rebuild the U.S. economy affected by the COVID-19 pandemic and continuing recession.

What Will the American Rescue Plan Do for Consumers? 

Reduce Required Household Contributions.  The American Rescue Plan improves affordability of health care coverage by expanding premium assistance for 2021 and 2022. It increases federal premium tax credits (PTC) by limiting the consumer’s required contribution to no more than 8.5% of household income, which means consumers at any income level may be eligible for more financial help, regardless of their Federal Poverty Level (FPL). This also means no consumer will pay more than 8.5% of household income toward the second lowest-cost Silver plan (benchmark plan), effectively eliminating the PTC “cliff” at 400% FPL.

How are you currently getting your Individual health insurance now? Directly from the insurance company or on Covered California?

Californians currently insured off-exchange (purchasing their health insurance direct from a health insurance company) AND uninsured Californians will have a significant increase in the amount of financial help available if they purchase insurance through Covered California: • Depending on your income, you could potentially save hundreds—or even thousands of dollars—by switching to the same or similar coverage through Covered California. 

If a consumer enrolls with the same carrier and in the same plan and provider network at Covered California as they had off-exchange, they can keep their Primary Care Provider, and payments toward their Deductible(s) and Maximum Out of Pocket will transfer to the new plan. 

Good news for people who are already getting their health insurance through Covered California

If you qualify for more subsidy on your health plan, Covered California will automatically determine your eligibility and increase your subsidy.  For at least one of our clients, the increased subsidy meant they qualified for more subsidy than their current plan cost for their family. We were able to upgrade their plan and reduce their monthly premium cost. That was such great news for them and it could possibly be the same for you.

If you are already on Covered California, as long as you stay with the same carrier, your accrued deductible and maximum out of pocket (MOOP) expenses will transfer even if you switch metal tiers (from bronze, silver, gold or platinum). 

For more information on whether you may qualify for a premium subsidy under the American Rescue Plan, click here to see the income chart from Covered California.

Please reach out to us at Benefits by Design for more information and help.