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For anyone who was on unemployment, Obamacare could be free the rest of 2021

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A man holds a sign directing people to sign up for Obamacare.

The Biden administration is offering free coverage until New Year's to people who have received jobless benefits in 2021. Joe Raedle/Getty Images

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A new insurance benefit from the latest COVID relief bill kicks in Thursday: free Obamacare health insurance for the unemployed for the rest of 2021. Just about everybody who received unemployment benefits this year is eligible. So, what’s the rationale behind this new benefit, and how will it work?

If you received at least a week of unemployment benefits this year and sign up for Affordable Care Act coverage, also known as Obamacare, “you could actually get an insurance plan for free,” said Vivian Ho, a health economist at Rice University.

She said someone receiving unemployment who’s just enrolling in Obamacare would save more than $7,000 in premiums, regardless of their income. They’d still be on the hook for co-pays of around $5 and a low deductible. 

“I do think it’ll help some people who are just really in a desperate situation right now. If you’ve lost your job in the middle of this pandemic and you have no income and you’re trying to deal with housing and put food on the table,” Ho said.

The Congressional Budget Office estimates that more than 1 million people will take the government up on its offer of free insurance.

“I think the goal was absolutely to make coverage as available and affordable as possible,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.

Even though the free coverage only lasts through this year, there’s a good chance the newly insured will stay on Obamacare because of other, temporary subsidies that last through 2022. 

“Once people get enrolled in a policy, they do tend to stick with it. Partly because they get access to doctors who then have a relationship with them,” said Katherine Baicker, health economist at the University of Chicago. 

And that will inch the Joe Biden administration closer to its goal of health coverage for all.

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