ACA subsidies cushion premium hikes, but affordability still an issue

Hundred dollar bills

Tax credits offered through the Affordable Care Act have made healthcare plans more affordable for those with low to moderate incomes, and are likely to alleviate any premium increases for that demographic in 2017, according to a report by The Commonwealth Fund.

Based on a survey conducted from February to April this year, two-thirds of adults with incomes below 250 percent of the federal poverty level (FPL) paid less than $125 per month for their marketplace plan, compared to 38 percent of those with incomes above 250 percent. Nearly 60 percent of people with ACA plans make less than 250 percent of the FPL, which qualifies them for the most generous tax credits.

Still, just half of all marketplace enrollees said their premium was either “somewhat” or “very” easy to afford, significantly less than the 75 percent of individuals with employer coverage.

Low-income individuals were also less likely to have high-deductible plans. Just 30 percent of individuals with marketplace plans under the 250 percent threshold had a deductible of $1,000 or more, compared to 68 percent of those with higher incomes.

Cost remains high priority for enrollees selecting marketplace plans. Thirty-six percent of those with ACA plans ranked premiums as the most important factor in choosing a plan, while 26 percent focused on the deductible and any copayments. Although the plan’s network was also a determining factor for 28 percent of enrollees, nearly 80 percent said they were satisfied with the physicians in their network. When given the option, 4 in 10 adults choose a marketplace plan with a narrow network.

Previous reports from The Commonwealth Fund indicated that 86 percent of marketplace enrollees are satisfied with their plan, and 60 percent of those with Medicaid or ACA coverage said they received medical care that was previously inaccessible or unaffordable.

Although insurers are predicting double-digit premiums increase for exchange plans in 2017, the report notes that tax credits will absorb the brunt of the higher premiums for low-income beneficiaries. However, higher premiums could have a sizeable impact on higher-income individuals that don’t qualify for federal subsidies.

- here’s The Commonwealth Fund report