ACA coverage less affordable over time for middle-class families, study finds

Middle-class families that don’t qualify for income-based help face an increasing financial burden when getting coverage on the Affordable Care Act’s insurance exchanges, a new study found.

The study published Monday in the journal Health Affairs found that middle-class families that are near-elderly age faced the greatest economic burden from the cost of coverage on the exchanges. The study comes as Congress is hoping to extend enhanced tax credits to those who make too much to qualify for help.

Researchers looked at families with income between 401 and 600 percent above the federal poverty level. The ACA cuts off income-based tax credits for people who make more than 400 of the federal poverty level.

The study included data from the American Community Survey from the U.S. Census Bureau from 2015 to 2019 and looked at premium data from the Centers for Medicare & Medicaid Services.

In 2015, half of this middle-class family population paid at least 7.7% of their income on the lowest-cost ACA bronze plan. But in 2019, this cost ballooned to 11.3% of their income. Beneficiaries that are between 55 to 64 years old faced an even larger increase, with such consumers paying nearly 19% of their income for the cheapest bronze plan in their area.

The main reason for the spikes was due to increases in premiums that outpaced any bumps in income, the researchers said.

While median family income for those in the affected income brackets increased by 3.5% from 2015 to 2019, the lowest available premiums surged between nearly 50% and 59%.

The burden also shifted based on how much the family earned. For example, families that had incomes of 401 to 500% of the poverty level had a median financial burden of 12% for the lowest-cost bronze plan. But families which had incomes between 501 and 600% paid 10.3% of their annual income and families above 600% paid out 6%, the study said.

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Researchers also compared spending on healthcare to other household needs such as housing, transportation and food.

“Our estimates of the median potential financial burden of bronze plans for 2019 suggest that families could expect to pay more for their marketplace coverage than for each category of household spending except housing and transportation, and an amount roughly comparable to the average percentage spent on food,” the study said.

The study comes as the American Rescue Plan Act signed into law earlier this year expanded tax credits for the 2021 and 2022 ACA coverage years. The law expanded credits to those making 400% above the poverty level, ensuring they would not pay more than 8.5% of their yearly income on the second cheapest silver tier plan in their area.

If the law had been in place in 2019, it would have reduced the financial burden for the second-cheapest silver plan by 44%, the study found.

But the enhanced credits are expected to expire after 2022, at which point middle-class families would again “face the entire cost of premiums and less affordable coverage,” the study said.

However, a framework for a $1.75 trillion infrastructure package in Congress aims to expand the tax credits. Democrats are hoping to pass the package, which also closes the Medicaid coverage gap, later this month.