“Free” Obamacare Coverage Available in 2018 for Most Subsidy-Eligible Individuals Earning $25,000 or Less, But It’s More Unaffordable Than Ever for Many Who Don’t Get Subsidies, eHealth Report Shows
Average premiums for the lowest-cost health insurance plan available through Healthcare.gov in surveyed cities to increase 26% in 2018, making health insurance “unaffordable” for many unsubsidized individuals by age 35
eHealth’s analysis found that the average individual earning
Highlights of eHealth’s analysis of costs in surveyed markets include the following.
Rate increases:
- Average premiums for the lowest-cost health insurance plan available will increase 26% in 2018 compared to 2017.
Zero-premium bronze coverage:
-
Most subsidy-eligible individuals earning
$25,000 or less per year will have access to free major medical coverage should they choose to apply their subsidy dollars toward the lowest-cost bronze plan rather than the benchmark silver plan. (Although these individuals would pay no premium, they may still pay deductibles and other out-of-pocket costs.) -
Most individuals age 55+ earning
$30,000 or less per year will have access to free major medical coverage should they choose to apply their subsidy dollars toward the lowest-cost bronze plan rather than the benchmark silver plan. (Although these individuals would pay no premium, they may still pay deductibles and other out-of-pocket costs.)
The subsidy cliff in surveyed markets:
-
Individuals whose income increases from 400 percent of the federal
poverty level (FPL) to 401 percent will face an additional
$3,263 in average health insurance premiums over the course of a year. -
The average cheapest bronze plan will cost
$194 per month, ($2,328 per year) for persons receiving the minimum subsidy (because they earn 400 percent of FPL). -
The average cheapest bronze plan will cost
$466 per month, ($5,591 per year) for persons not receiving a subsidy (because they earn 401 percent of FPL). -
The difference in income between someone earning 400 percent of FPL
and 401 percent is approximately
$120 per year.
The affordability gap:
-
The lowest-priced health insurance plan will cost
$5,591 per year for the average person in the surveyed markets not receiving a subsidy, making health insurance “unaffordable” (according to Affordable Care Act rules) if they earn less than$69,457 in household income in 2018.
“These 2018 premium figures are striking because they show the gap is
widening between the health insurance haves and have-nots,” said eHealth
CEO
In preparing its analysis, eHealth reviewed data published on Healthcare.gov to find the lowest-cost plans available and the second-lowest-cost silver plans available in 2018 for persons age 25, 35, 40, 45, 50, 55 and 64 in 40 metropolitan areas.
Calculating Tax Credits and the ACA’s Affordability
According to the rules of the Affordable Care Act (the ACA or Obamacare) the second-lowest-cost silver plan available, known as the “benchmark” plan, is used in calculating the dollar value of advanced premium tax credits (premium subsidies). Persons earning up to 400% of the federal poverty level may be eligible for premium subsidies. Under ACA rules, health insurance is considered “unaffordable” when the lowest-priced plan available costs more than 8.05% of household income (MAGI) in 2018. See the methodology note below for more information.
Average Monthly Premiums for Individuals Earning
| Age |
Lowest cost |
"Benchmark" |
Affordable price |
Subsidy amount |
Bronze price |
|||||
| 25 | $275 | $385 | $127 | $258 | $17 | |||||
| 35 | $333 | $467 | $127 | $340 | $0 | |||||
| 40 | $349 | $489 | $127 | $362 | $0 | |||||
| 45 | $394 | $554 | $127 | $427 | $0 | |||||
| 50 | $488 | $685 | $127 | $558 | $0 | |||||
| 55 | $608 | $854 | $127 | $727 | $0 | |||||
| 64 | $815 | $1,142 | $127 | $1,015 | $0 | |||||
| Average | $466 | $654 | $127 | $527 | $0 | |||||
Average Monthly Premiums for Individuals Earning
| Age |
Lowest cost |
"Benchmark" |
Affordable price |
Subsidy amount |
Bronze price |
|||||
| 25 | $275 | $385 | $204 | $181 | $94 | |||||
| 35 | $333 | $467 | $204 | $263 | $70 | |||||
| 40 | $349 | $489 | $204 | $285 | $64 | |||||
| 45 | $394 | $554 | $204 | $350 | $44 | |||||
| 50 | $488 | $685 | $204 | $481 | $7 | |||||
| 55 | $608 | $854 | $204 | $650 | $0 | |||||
| 64 | $815 | $1,142 | $204 | $938 | $0 | |||||
| Average | $466 | $654 | $204 | $450 | $16 | |||||
Subsidy Cliff Analysis: Cost of Insurance for Individuals Earning 401% of FPL vs. 400%
| Age |
Average
|
Monthly |
Average |
Average lowest
|
Average lowest |
|||||
| 25 | $385 | $1 | $384 | $275 | $274 | |||||
| 35 | $467 | $83 | $384 | $333 | $250 | |||||
| 40 | $489 | $105 | $384 | $349 | $244 | |||||
| 45 | $554 | $170 | $384 | $394 | $224 | |||||
| 50 | $685 | $301 | $384 | $488 | $187 | |||||
| 55 | $854 | $470 | $384 | $608 | $138 | |||||
| 64 | $1,142 | $758 | $384 | $815 | $57 | |||||
| Average total | $654 | $270 | $384 | $466 | $196 | |||||
Affordability Gap: Income Level Where Bronze Plans Become “Affordable”
|
Average lowest-priced bronze |
Average lowest-priced bronze |
Income at which bronze becomes |
||
| $466 | $5,591 | $69,457 | ||
Methodology
eHealth surveyed 2018 monthly premium rates for the lowest-cost
ACA-compliant plan, lowest-cost bronze plan, and the benchmark silver
plan available in 40 cities/metropolitan areas for individuals at ages
25, 35, 40, 45, 50, 55 and 64. Rates were gathered through the 2018 plan
preview feature on Healthcare.gov in
Premium increases from 2017 to 2018 were calculated by dividing the
monthly premium for the lowest cost plan in 2018 by the monthly premium
for the lowest cost plan for 2017 in eHealth’s
Each plan in each market had its own rate increase for 2018. Rates may vary from zip code to zip code within the same metropolitan area or state, and less-costly plans may be available in some cases to consumers who do not use Healthcare.gov.
In determining the subsidy threshold – the point at which government
subsidies are no longer available to people purchasing qualifying health
plans – eHealth employed federal poverty-level guidelines for the
contiguous
The affordable price of a health insurance plan for persons not
receiving subsidies is calculated as 8.05% percent of household income
for 2018. Health insurance is considered unaffordable under the ACA for
such persons when the lowest-priced available plan exceeds this amount.
For persons receiving subsidies, the affordable price, and by extension
the dollar value of subsidies, varies based on income. Subsidies may be
available to people with a household income of up to 400 percent of the
federal poverty level. In calculating affordability for the present
report, eHealth used figures derived from
All dollar amounts in this report were rounded to the nearest full dollar.
Cities included in the 2018 analysis are:
About eHealth
For more health insurance news and information, visit eHealth's Consumer Resource Center.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171101005738/en/
Source:
DMA Communications for eHealth, Inc.
Sande Drew, 916-207-7674
sande.drew@ehealth.com
or
eHealth,
Inc.
Nate Purpura, 650-210-3115
nate.purpura@ehealth.com