ACA plans are too expensive for the majority of Americans, according to a study published Jan. 6 in Medical Care.
With enhanced subsidies still in limbo, the study relied on Commonwealth Fund definitions to evaluate unaffordability: At least 10% of household income spent on insurance premiums and/or 5% spent on deductibles.
“Without subsidies, we found between 68% to 99% of plans would be unaffordable based on premium costs for the average ACA consumer,” University of Colorado Anschutz Department of Medicine Associate Professor Risha Gidwani, DrPH, said. “On the other hand, extending premium tax subsidies creates affordability problems for the individual American taxpayer, who generates most of the revenue used to fund these subsidies.”
Here are four other notes on the research:
1. By looking at people who had incomes of 400% above the federal poverty line, at least three-quarters of plans had unaffordable premiums for two-adult households in nearly 99% of markets. At least three-quarters of plans in 97% of markets had unaffordable premiums for a 50-year-old individual, if subsidies are not renewed. The latter is a particular concern for Dr. Gidwani as more than half of this population has a chronic condition.
2. Eight-five percent of ACA consumers opted for bronze and silver plan tiers, correlating to greater federal subsidy support.
3. ACA premium tax credits could cost $350 billion over the next decade, with concerns over how much is being funneled to private insurance companies. “We are encouraging Congress to investigate the reasons why ACA premium costs are so high in the first place,” Dr. Gidwani said.
4. The study’s author was not just concerned with premiums and the role of tax credits: “Policymakers concerned about affordability need to keep an eye on both deductibles and premiums. Deductibles have, to date, been underdiscussed in policy conversations regarding the ACA and are a real challenge for those seeking access to care,” Dr. Gidwani said.
