Last-minute advice for getting a discounted Obamacare plan

The window for people to enroll for 2021 ends Sunday.

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Myelle LansatNews EditorMyelle Lansat is a former news editor at Policygenius, where she covered insurance and personal finance. Previously, she was a personal finance writer at CNBC and Acorns, and a reporter for Business Insider.

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The deadline to enroll in an Affordable Care Act marketplace health care plan is Sunday. If you make the deadline, you could be eligible for subsidies that may reduce or eliminate your premium payments in 2021 thanks to a stimulus bill passed in March. Many people will be able to buy plans with lower or free monthly premiums.

With the deadline fast approaching, here’s what you need to know about qualifying for the extra health care benefits.

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Will your premiums really be free?

The ACA already provided subsidies that reduced premiums for individual health plans purchased through or the state exchanges. The law passed in March increased those subsidies to the point that for some people, their premium costs will drop to zero. People whose income is below the poverty line don’t qualify for subsidies, but can qualify for Medicaid

The stimulus bill lowers the amount people at every income level have to pay for health insurance. For people earning below 150% of the poverty line, it cancels premiums altogether.

For example, someone making $15,000 would pay nothing for health insurance and someone earning as much as $160,00 will get a discount for 2021 and 2022

Who should apply?

If you were unemployed at any point in 2020, you automatically qualify for a marketplace plan and subsidies that could eliminate your premium payments, says Caitlin Donovan, a spokeswoman for the National Patient Advocate Foundation. 

There’s added urgency to apply for a plan on if you’re receiving COBRA. The American Rescue plan made COBRA premiums free, but only until Sept. 30. However, if you’re currently employed and qualify for an employer-sponsored health care plan, you will not qualify for a plan on the ACA marketplace. 

If you’re already enrolled in an ACA health care plan, Donovan says it’s important to reevaluate your benefits and consider shopping around. “Take a little health care audit and see if you can find a better plan for your money,” Donovan says. 

Picking the right plan for you 

The window for people to enroll for 2021 plans on ends Sunday. Some states, including New Jersey and California, have extended the enrollment period through the end of the year. 

When you’re reviewing your health care options, it’s important to remember that you could have high medical costs even with a lower monthly premium, Donovan says. There are four levels of coverage with varying prices and offerings: bronze, silver, gold, and platinum. You’ll generally have lower premiums with a bronze plan, but your annual deductible can be as high as $8,000. That’s compared to a platinum plan, which has higher premiums but a deductible as low as $1,000. 

Even with free or lowered premiums, your medical costs won’t totally be free, Donovan says. You’ll still have to pay for out-of-pocket medical costs and receive medical bills. The best way to plan for these costs before you have to pay them is a health savings account, she says. You can contribute tax-free dollars towards HSAs and use that money for qualifying medical expenses. If you’re hit with a surprise or large medical bill you can’t afford, you can negotiate it. But you can only have an HSA if you choose a high-deductible health plan.

The deadline may be approaching to qualify for lower or free health care premiums, but it’s important to protect yourself. 

“We’re still in the midst of a pandemic. The best time to get health insurance, especially if you’re unemployed, is right now,” Donovan says.

Image: nortonrsx / Getty Images

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