The ongoing pandemic has undoubtedly presented more than its fair share of challenges to communities across the country, as well as to the frontline healthcare workers, such as community pharmacists, who dutifully serve them. Additionally, while it can be at times difficult to look beyond COVID-19, each year pharmacists also play a critical role in ensuring patients receive the right healthcare coverage.
A key aspect of helping patients find the right plan is both knowing about the plans offered in the marketplace, as well as understanding how any new legislation may affect patient eligibility or their wallet. A recent Kaiser Family Foundation study examines the impact the subsidies contained in the new COVID-19 relief package have on lowering health plan costs for the majority of the ~15 million uninsured people who are eligible to buy on the Marketplace and the ~14 million people insured on the individual market. In fact, according to the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT), an estimated 1.7 million people are expected to gain coverage through the Marketplace in 2022.1
With this sudden influx of Americans gaining coverage under The American Rescue Plan Act, it is important that community pharmacists understand the impact of the COVID-19 relief law’s health plan provisions, so that they can continue to serve their patients through informed counsel and guidance.
But first, a quick refresher on the landscape of the marketplace prior to enacting this new sweeping federal legislation is in order.
The Affordable Care Act (ACA)
Passed back in 2010, the Affordable Care Act (ACA) made premium tax credits available to people purchasing health coverage on the Marketplaces, but generally only when their incomes are between 100%-400% of the federal poverty level. This structure creates a steep subsidy cliff at 400% of the poverty level.
For example, a 60-year-old making $50,000 per year would pay about $410 per month for a silver plan. However, if their income was $52,000 per year – just over 400% of poverty – they must pay the full-priced premium of about $957 per month – nearly double!2
Enter the American Rescue Plan Act of 2021.
The American Rescue Plan
Signed into law by the current White House administration in March of 2021, this comprehensive piece of legislation is historic in its efforts to increase and expand Marketplace subsidies, lowering health plan premiums for virtually everyone who is already eligible, and some who were ineligible due to being in the ACA’s subsidy cliff.
Broadly speaking, the COVID-19 relief package impacts health plans in three ways:
- Expands Marketplace subsidies for those making above 400% of poverty, flattening the ACA’s subsidy cliff
- Increases Marketplace subsidies for those who need it most – lower income individuals making between 100-400% of the poverty level
- Expands marketplace subsidies for those receiving unemployment insurance (UI)
Flattening the subsidy cliff
As mentioned, the American Rescue Plan Act helps to flatten the ACA’s subsidy cliff. To date, those seeing some of the most significant savings from subsidies are older people with incomes just above 400% of poverty ($51,040 for an individual). Why? Well, research shows that uninsured people in the subsidy cliff tend to be older than those who are eligible for subsidies.
The numbers back it up, too.
Take a 60-year-old with a $55,000 income, for example. Under the American Rescue Plan, this person will pay, on average, 77% less for a bronze plan ($146 vs. $634 per month), 56% less for a silver plan ($390 vs. $887 per month), and 52% less for a gold plan ($453 vs. $951 per month).3 Young adults in the subsidy cliff will also see savings, just much more modest by comparison (6-9%).
Helping low-income individuals
In addition to addressing the subsidy cliff, the COVID-19 relief law also provides substantial subsidies to those who are already eligible, and who need it most – low income individuals making 100-400% of the poverty level. In fact, enrollees with incomes below 150% of poverty can now access a zero-dollar premium silver plan with an average deductible of just $177.4
And while it is true that most of these enrollees would have been eligible for a zero-premium bronze plan under the ACA, bronze plans typically have a deductible of about $6,900, some 97% higher.5 This provision is particularly impactful, as it would guarantee zero-premium silver plans to at least 3.4 million of the lowest income enrollees.6
Unemployed now welcome
Anyone who qualifies to purchase a health plan on the Marketplace and who received (or is receiving) UI, can get a silver plan with a $0 premium under the American Rescue Plan Act.7 In fact, this benefit also extends to any eligible dependents of the qualifying individual. That said, qualifying individuals must attest that they do not have an affordable offer of employer-sponsored insurance from their spouse or family member, which would be disqualifying.
Plan ahead with PrescribeWellness
Thanks to the American Rescue Plan Act, millions of more Americans – particularly older Americans – are gaining health insurance. However, there is a difference between having a health plan and having the right health plan.
While Open Enrollment isn’t until the fall, pharmacists can rest easy knowing that they will be well supported by the PrescribeWellness Medicare Plan Review solution when that time comes. By utilizing the Medicare Plan Review solution, pharmacists can leverage easy plan comparisons to help their patients find the plan that is right for them – all while simplifying pharmacy workflow. With advanced filtering capabilities, pharmacists can strategically target and engage high-impact Medicare-eligible patients based on factors such as: highest billing totals, plan costs, low medication adherence, and multiple maintenance medications regimens.
Open Enrollment will be here before you know it. To learn more about how PrescribeWellness can support your community pharmacy practice to implement and sustain a successful Medicare Plan Review program, please leave your information below to contact us directly!