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HHS Report Reveals That Many Affordable Care Act Consumers Received Large Subsidies

HHS Report Reveals That Many Affordable Care Act Consumers Received Large SubsidiesIn a recently released 26 page report the Department of Health and Human Services revealed that federal subsidies cover 76 percent of premiums for those who have signed up for coverage under the Affordable Care Act in the 36 federally administered markets. According to the Los Angeles Times, the total cost of subsidies could exceed $16.5 billion this year, which is significantly higher than the $10 billion cost that the Congressional Budget Office projected earlier this year.

While the extent of the subsidies appears to be the issue generating the most interest, the report more broadly addresses premiums, competition, and choice among plans in the insurance marketplace. It specifically notes the items mentioned below:

  • Tax credit subsidies helped reduce the average individual's premium from $346 to $82 per month.

  • Sixty-nine percent of individuals selecting plans with tax credits have premiums of $100 or less after tax credits—nearly half (46 percent) have premiums of $50 or less after tax credits.

  • Most individuals had a wide range of health plan choices. 82 percent of individuals eligible to purchase a qualified health plan live in rating areas with 3 to 11 issuers in the Marketplace; 96 percent live in rating areas with 2 to 11 issuers in the Marketplace.

  • Competition, as measured by the number of issuers in a rating area, is associated with more affordable benchmark plans (the second-lowest cost silver plan) for individuals and reduced costs for the federal government. An additional issuer in a rating area is associated with a 4 percent lower benchmark premium.

Rating areas with a greater number of issuers also tend to offer a wider range of choices among plan types (e.g. PPOs, HMOs) to better meet consumers’ preferences and financial needs.

The report also includes a state-by-state comparison of the amounts residents pay for coverage after subsidies are considered. Figures reveal that Mississippi residents paid the least for coverage after subsidies (averaging $23 per month on premiums of $438), while New Jersey residents paid the most (an average of $148 per month on premiums of $465).

Michigan residents paid on average $97 per month on premiums of $342, a 72 percent reduction in premium after tax credits.

For more information on the Affordable Care Act, please contact one of the Foster Swift healthcare experts.

Categories: Health Care Reform, Health Insurance Exchange

Photo of Mindi M. Johnson

With a business-minded approach, and service-oriented delivery, Mindi helps clients navigate challenges and solve problems in the areas of employee benefits law and health care law. Mindi has spoken and written extensively on employee benefits, health care reform, and health care law topics, and is actively involved in a number of legal, professional and industry organizations focused on these issues.

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Best Lawyers® 2021

Congratulations to the attorneys of the Health Care practice group at Foster Swift Collins & Smith, PC for their inclusion in the Best Lawyers in America 2021 edition. Firm-wide, 44 lawyers were listed. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation and as lawyers are not required or allowed to pay a fee to be listed; inclusion in Best Lawyers is considered a singular honor. Health Care practice group members listed in Best Lawyers are as follows:

To see the full list of Foster Swift attorneys listed in Best Lawyers 2021, click here.