2.2M Exchange Enrollees Missing Out on ACA’s Subsidies

More than two million U.S. residents with exchange coverage could be missing out on cost-sharing subsidies that help lower health costs, such as copayments and deductibles, because they did not purchase silver plans, according to an Avalere analysis released Wednesday, Kaiser Health News reports.

Background

Under the Affordable Care Act, the subsidies are available to individuals with silver plans whose incomes are between 100% and 250% of federal poverty level. According to a Kaiser Family Foundation analysis, the average silver plan in 2015 had an annual deductible of $2,556 for an individual's medical and drug costs. Cost-sharing subsidies would reduce those costs to:

• $2,077 for individuals with incomes between 200% and 250% of poverty level;
• $737 for individuals with incomes between 150% and 200% of poverty level; and
• $229 for individuals with incomes below 150% of poverty level.

Some Missing Out

Avalere researchers analyzed income data on individuals enrolled in exchange plans in 2015. They found that 8.1 million U.S. residents with exchange coverage had income levels that would have qualified them for the cost-sharing subsidies. However, the analysis found just 5.9 million people received the subsidies, which automatically are distributed when qualifying individuals enroll in silver plans.

Avalere Vice President Elizabeth Carpenter said individuals who do not receive the cost-sharing subsidies likely purchased bronze plans, which tend to have lower premiums. She added, "Surveys show that people shop for plans based on premiums. But if somebody forgoes cost-sharing reductions in order to pay a lower monthly premium and then has an unexpected accident or illness, their out-of-pocket exposure is likely to be higher" (Andrews, Kaiser Health News, 8/21).

The analysis noted people might be missing out on the cost-sharing subsidies because they have not been advertised to the same extent as the ACA's broader premium subsidies (Herman, "Vital Signs," Modern Healthcare, 8/20).