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Almost every county in the U.S.’s HealthCare.gov exchange has free health insurance plans available on the individual exchanges during the current open enrollment, according to a new analysis from Avalere, a public health care firm.
According to the Department of Health and Human Services, 80% of ACA enrollees can find plans in which they pay just $75 a month. Last year, the number was just 71%.
Currently, 36 states use HealthCare.gov as their exchange and open enrollment began on Nov. 1 and will last until Dec. 15.
FILE PHOTO: A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October 2, 2013 photo illustration. REUTERS/Mike Segar/File Photo
Low income consumers can thank an unlikely source: Trump
The rise in low-cost and free plans for people receiving subsidized insurance is due to a ripple effect of the Trump administration’s scrapping of cost-sharing reduction payments to insurers.
Ending the cost-sharing subsidies for insurers means that the insurance companies must raise premiums significantly. But because the Affordable Care Act, otherwise known as Obamacare, provides premium subsidies for lower-income consumers, the subsidies have had to go up along with the premiums.
“Effectively that action has created more subsidies for those who receive financial help,” Joshua Peck, former HealthCare.gov CMO and co-founder of Get America Covered, a group that promotes the ACA, told Yahoo Finance.
These inflated subsidies are tied to Silver Health Plans, but consumers can apply them to cheaper Bronze Health Plans if they so choose — which did not go up significantly. In many cases the increased subsidy entirely covers the cost of a Bronze Plan.
Bronze, Silver, Gold, and Platinum plans
Plans are often correlated to a “metal” level, with Bronze Plans having the lowest premiums and highest cost-sharing, followed by Silver’s moderate cost-sharing but higher premiums. Bronze Plans are generally favored by those who expect to receive less medical attention. This continues up to Gold and Platinum, the latter of which has the lowest cost-sharing but the highest monthly premiums.
Bronze Plans are generally safety net plans favored by those who want low premiums and are willing to pay more if they do need medical attention.
“The curious effect of the Administration’s elimination of the cost-sharing reduction payments is that many subsidized individuals may find that they pay less for premiums in 2018,” wrote Caroline Pearson, senior vice president at Avalere, in a press release detailing its analysis.
Eligibility for these plans depend on age and income. By and large, more plans become free the older the consumer gets, and 98% of counties in the U.S. are providing free Bronze Plans for 50-year-olds earning 150% of the federal poverty level or less. ($18,090 for a single person or $36,900 for a family of four.)
In some cases, however, the subsidy increases have been enough to cover Silver and even Gold plans. For 50-year-olds making 150% of or below the federal poverty level, 10% of counties in the U.S. offer a free Gold Plan, and 18% offer a free Silver. It also means that the difference in premium between a Silver Plan and a Gold Plan may be as little as $10 per month, Avalere’s analysis found.
This move hurts higher-income people
There is a flipside. The subsidies increased because premiums increased, so consumers who aren’t eligible for subsidies will see increased premiums thanks to the Trump administration’s move.
These are the same “Obamacare victims” President Donald Trump and Vice President Mike Pence say they are trying to help — those left exposed to the full brunt of rising health care costs, in this case, due to Trump himself.
“The Trump administration’s decision to halt CSR payments are going to hit consumers who aren’t receiving financial help this year hard,” said Peck. Approximately 20% of ACA enrollees are not eligible for these subsidies and must pay full price.
Peck has some advice for them: Shop around. “They should absolutely shop,” he said. “They may be able to find a better price.”