How much have premiums fallen?

Pile of cash on top of medical forms, stethoscope on top.
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Since the American Rescue Plan was passed in March, out-of-pocket costs have tumbled significantly.

New insurance enrollees registering for a plan from Feb. 15 to March could expect to pay monthly premiums of $117.

But once April hit and the tax credits were factored in, premiums dropped to $86, according to HHS.

It’s not just new plan holders who are finding savings through these tax credits. Nearly 2 million current enrollees have come back to the marketplace and seen their monthly premiums drop by up 40%, according to HHS.

“Across America there is a need and demand for high-quality, low-cost health insurance,” says HHS Secretary Xavier Becerra. “That’s why we are doing all we can to reach people who need coverage.”

Whether you need a little extra money to cover household expenses or pay down debt, with these new premiums, you could soon free up hundreds of dollars in your monthly budget.

What about out-of-pocket costs?

For 2021, the out-of-pocket maximums you’ll have to pay for an Obamacare plan are $8,550 for an individual plan and $17,100 for a family.

But with more choice available to them through the tax credits, Americans have been able to afford signing up for health insurance plans that offer lower out-of-pocket maximums.

HHS reports that the median deductible for new consumers has already fallen by nearly 90%, from $450 before April 1 to $50 currently.

How are these savings possible?

Close up of doctor going over forms with patient across the table from them.
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While the ACA made health insurance more affordable for millions, until recently, many have found the subsidized plans still eat up a huge chunk of their income.

But with Biden’s bill, from now on, your health coverage costs will be limited to no more than 8.5% of your income. Before signing the bill, that percentage stood at 10%.

For lower-income policyholders, as the HHS estimates show, the new subsidies will completely eliminate your premiums.

And for the first time, these rules now extend to those earning more than 400% of the federal poverty level, which works out to about $51,000 for individuals and $104,800 for a family of four.

Based on HHS’s estimates, about 9 million Americans could see massive health insurance savings:

  • $1,000 a month on their premiums for an uninsured couple earning more than $70,000.
  • $200-a-month premium decrease for a family of four with a household income of $90,000.
  • $0 premiums for an individual earning $19,000 — an average savings of roughly $66 per month.

Want to figure out how much your family could save? This handy subsidy calculator can help you find an approximation of your discounted rates.

What do I need to do?

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If you want to take advantage of the new subsidies, there’s some action needed on your part.

For current enrollees, HHS suggests reviewing your application on and making any necessary changes to the information before submitting. Then, you should either select a new plan or reselect your old plan to receive the increased premium tax credits.

You have until Aug. 15 this year to make your plan selection, but taking action right away would mean you’d lock in those lower premiums and costs as of June 1.

If you live in a state that runs its own marketplace platform, you should visit your state site or call their helpline to get more information on when these additional savings will be available through your state-based marketplace.

What to do if you need more money now

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If you can’t wait a few weeks for new premiums to kick in, or you need a little extra boost on top of that, you have a few options to free up some funds right now.

  • Make saving your policy. Amped from all your health insurance savings? Shop around for a better rate on auto insurance and save yourself up to $1k on your annual premiums. And while you’re at it, use the same technique to save hundreds on homeowners insurance, too.

  • Turn your pennies into a portfolio. Forget everything you thought you knew about the stock market: You don’t need to be rich, know all the lingo or pay massive brokerage fees to see serious gains. Using a popular app, you can invest using "spare change" from everyday purchases and transform those pennies into serious profits.

  • Save while you shop online. You know you're going to spend time shopping on the internet — who doesn't? — so you might as well make sure you're not overspending. By installing a free browser extension, you can can find the lowest availble prices on the items you want in your cart.

About the Author

Sigrid Forberg

Sigrid Forberg


Sigrid is a reporter with MoneyWise. Before joining the team, she worked for a B2B publication in the hardware and home improvement industry and ran an internal employee magazine for the federal government. As a graduate of the Carleton University Journalism program, she takes pride in telling informative, engaging and compelling stories.

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