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Potential Savings on Health Insurance under the American Rescue Plan (ARP)

| April 06, 2021

Introduction &  Disclosure:  - Details can be critical

My opinion but still important: The Pandemic has changed some things profoundly. We will wait and see what changes back and what stays. To younger readers the following will partially show my age ("geezerhood.") I remember floppy disks. I remember when a nice upgrade in a PC was when you could have two floppy disk drives instead of one. Not being an actual computer expert, i believe but can't prove this was before an end user could download and install a program.

Now we have gotten to the point - at least perhaps hypothetically - where your ability to access wifi / broadband and have some knowledge of how to use a computer can be life or death - getting your COVID vaccine.

Regarding health insurance, maybe or maybe not life or death, but somewhat similarly, details matter. In the hypothetical example explained in more detail below, a 62 year old couple with a MAGI (Modified Adjusted Gross Income) of $70,000 - AND - with an assumed personal tax situation being able to take full advantage of a tax credit - their health insurance cost drops from $23,838 per year to $5,950 per year - a potential savings of $17,888 - or as Uncle President Joe could hypothetically say, that is a BFD!

FYI: Key Detail: Health insurance must be purchased at for this example to work.

NON-Target Audience

So people who have health insurance provider(s) selected for them e.g. from an employer or from Medicare / Medicaid - will not get this opportunity because it simply does not apply to them. On the other hand, certainly Medicare and probably employer health plans could potentially be dramatically less expensive for a 62 year old couple. 

Target Audience: People who choose their own Health Insurance

Hypothetical Detailed Example

  1. 62 year old couple
  2. $70,000 MAGI
  3. $23,838 per year for silver (2nd cheapest) plan in their zip code.

As mentioned above, based on the facts above, this couple would receive a tax credit of $17,888. So their "net" cost of health insurance is potentially lowered very significantly.

N.B. Not covered in this post but there are also possible benefits for people who have received even one week of unemployment benefits in 2021. And people who might be eligible and end up using COBRA.



  1. "Client Opportunities for Health Insurance Coverage Under the American Rescue Plan" by Carolyn McClanahan, MD, CFP

  2. "American Rescue Act Plan of 2021" Source: Wikipedia