In addition to a third round of relief payments coming down the pike, the new administration's proposed $1.9 trillion spending package could substantially decrease what you pay out-of-pocket in health insurance premiums.
Here’s what the legislation would include, and how much you could save on your bills.
Strengthening the Affordable Care Act
With Democrats holding the White House and a slim majority in Congress, they’re looking to strengthen Obamacare and put affordable health insurance within reach — especially as millions of Americans lose their health plan as a result of the pandemic.
A provision written into Biden’s proposed relief package would add billions in federal subsidies that assist Americans with their health insurance premiums.
The plan takes aim at two areas.
The first is the lack of subsidies for those earning more than 400% of the federal poverty line, which stands at $51,520 for an individual and $106,000 for a family of four. If you make even a hair over that cap, your out-of-pocket premium costs surge.
The second would increase tax credits for low-income Americans, which would in turn drastically reduce premiums, or in some cases even eliminate them altogether.
So how much can I save?
Under the White House’s plan, the amount of money an individual or family pays in health insurance premiums would be capped at 8.5% of their income.
According to the Center on Budget and Policy Priorities, a family of four earning $110,000 would see monthly premiums for a midlevel health plan fall by an average of $750.
Meanwhile, experts predict that the new administration will repurpose a bill, passed in the House of Representatives last summer, that would have put even stricter caps on out-of-pocket premiums for low-income Americans — with the result that someone making 150% of the poverty line would pay nothing for a health plan.
According to a 2018 survey, nearly half of Americans struggled to find an affordable plan.
If you can’t get affordable health coverage through your employer, and you’re not eligible for Medicare, Medicaid or other federal insurance, you’ll need to shop for insurance through a marketplace like healthcare.gov.
You can find the cheapest policy by comparing rates from multiple insurance companies. A free service from SmartFinancial will help you compare quotes online in just minutes.
What if I need even more savings?
If saving on health insurance isn’t enough, here are a few more ways to give your bank account a boost until the economy bounces back:
Switch to a high-deductible health plan. If your medical bills are typically limited to physicals and screenings, a high-deductible plan could save you money on premiums. Switching to one of these plans could also make you eligible for a health savings account (HSA), a tax-advantaged account just for medical-related expenses.
Save on other insurance bills. If you’re driving less during the pandemic, see if your insurance company will cut your rates. If not, why not find a new one that will? You can also save hundreds on your homeowners insurance by doing some comparison shopping to find a better deal.
Develop a side hustle. You can turn your hobby into a lucrative side gig using the world’s largest online marketplace for digital services. Just create a profile describing your in-demand skills, and see who comes calling.
Refinance your mortgage. Want to really slash your bills? Even if your mortgage is a year old, you could refinance to a much lower interest rate. With rates hovering near all-time lows, about 19.4 million U.S. homeowners could cut their house payments by an average $308 per month, according to mortgage tech and data provider Black Knight.