Cost-sharing reduction plans save individuals $479 annually

By 2016, nearly 14 million eligible individuals will qualify for cost-sharing reductions (CSR), according to new research from the Robert Wood Johnson Foundation. Should those eligible enroll in a marketplace plan, they would save an average of $479 per year on co-pays, deductibles and co-insurance.

The RWJF used the Urban Institute's Health Insurance Policy Simulation Model to simulate eligibility for financial assistance. Listed below are some key findings from the research.

Income

CSRs were created under the Affordable Care Act as a way to lower direct out-of-pocket payments and ensure access to care for low-income individuals. They are only available for individuals with annual income at or below 250 percent of the federal poverty level (FPL). 

The researchers found that individuals who qualify for CSRs are evenly split among the following incomes: at or below 150 percent of the FPL, between 150 percent and 200 percent of the FPL and between 200 percent and 250 percent of the FPL.

Family status

About 49 percent of individuals eligible for CSRs are single adults with no children, the research found. Nearly 23 percent are individuals in married families with children, while 16 percent are married couples with no children, and 12 percent are single adults with children. Single adults with no children are among those most likely to qualify for CSRs, as their eligibility level for Medicaid sits below that for adults with children. Medicaid expansion makes coverage available in participating states to those with an income at or below 138 percent of the FPL.

Health status and spending

The research found that almost 15 percent of qualified individuals noted their health status as being "fair" or "poor." Total health spending probably would be higher for those on CSRs ($4,700) than those who receive premium tax credits ($4,400). If used, the average value of the CSR per person would be about $480, ranging from an average of $693 for those below 150 percent of the FPL to $217 for those between 200 and 250 percent of the FPL.

While the number of individuals on CSRs is expected to grow substantially, insurers have varying interpretations of meeting cost-sharing requirements, FierceHealthPayer previously reported. As a result, deductibles for CSR plans offered on the federal insurance exchange vary considerably, as do specialty drug copays.

For more:
- here's the research (.pdf)

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