Relief bill contains welcome fix on health plan costs

The new $1.9 trillion COVID economic recovery package won't just provide relief checks to eligible Americans. It's also likely to deliver serious savings to the 14.9 million Americans who buy health insurance on their own.

The individual health insurance market serves those who don't get coverage from an employer or through a public program, such as Medicare for seniors. The COVID recovery package includes a commendable, though temporary measure that boosts and expands financial aid for those who purchase a health plan through MNsure or other online marketplaces set up by the Affordable Care Act (ACA).

Many consumers who previously earned too much to qualify for this assistance will be newly eligible. And those who already qualified when they signed up for a plan should see additional savings in monthly premium costs.

MNsure has run some early calculations on how the stimulus package, dubbed the American Rescue Plan, will help Minnesotans better afford health insurance. CEO Nate Clark shared several scenarios Wednesday at a board meeting:

• Annual savings of $1,584 for a Ramsey County household of two people in their 30s who make $35,000 a year.

• A family of four in northwest Minnesota's Polk County, with parents in their 40s, making $75,000 a year could see coverage costs decrease by $3,000 a year.

• A Mower County couple ages 59 and 61 with a household income of $75,000 could save a stunning $18,060 annually.

There's a wow factor in that third example, and there's a reason for it. While the ACA helped many people better afford coverage, it also had a built-in "cliff." Eligibility for its financial aid ended when yearly incomes reached 400% or more of the federal poverty level. That's $51,040 for a one-person household, $68,960 for two people and $104,800 for four people.

But affordability remained daunting after this cutoff. Many farm families, who often buy on the individual market, made too much to qualify for ACA subsidies but still struggled to buy coverage. A rural southeast Minnesota couple featured in a Sept. 5 Star Tribune editorial had a $1,900 monthly premium with a combined annual deductible of around $13,000.

Because the American Rescue Plan temporarily ends the ACA's financial aid eligibility "cliff," the couple featured in the editorial should now be eligible for the ACA's financial subsidies. MNsure's Mower County scenario suggests they could see significant savings.

President Joe Biden signed the American Rescue Plan on Thursday. The expanded health insurance aid it provides runs for two years. Congress should gather data on who it helps and strongly consider making this change permanent.

MNsure CEO Clark noted that the enhanced aid will be applied automatically to plans bought through MNsure. About 128,000 Minnesotans have private coverage purchased through the site.

MNsure will need time to make information technology updates, but the new financial aid is retroactive to Jan. 1, 2021, or the first month of an enrollee's 2021 coverage on MNsure, whichever is later. Those retroactive benefits can be collected as a credit during tax filing for 2021.

The estimated 53,000 Minnesotans who have a private plan purchased outside of MNsure can also, for a limited time, cancel it and buy one through the marketplace. These consumers would be eligible as well for the new subsidies, potentially making a new plan more affordable.

This can be done during a special enrollment period running through May 17. Those who are currently uninsured can sign up for coverage and the enhanced aid through MNsure during this time period as well.

Clark rightly called the fix "a big deal" and urged Minnesotans to "not leave money on the table." Keeping consumers covered and their pocketbooks healthier, too, will help a pandemic-weary nation regain its footing in the months ahead.