Affordable Care Act premiums are becoming unaffordable for many middle-income Americans who don’t qualify for federal subsidies, according to a new analysis by the Kaiser Family Foundation. The affordability problems are especially acute for older adults with incomes above 400 percent of the federal poverty line, particularly those living in rural areas, the analysis finds.
Most people who buy health insurance through the Affordable Care Act’s exchanges qualify for tax credits to help them afford their plans, and as their premiums rise, their subsidies do as well. But eligibility for those subsidies is cut off for people with incomes of at least 400 percent of the federal poverty level. That “subsidy cliff” has left some middle-income people struggling to afford ACA plans; while the number of subsidized enrollees grew from 8.7 million in 2015 to 9.2 million in 2018, the number of unsubsidized enrollees over that same timeframe fell from 6.4 million to 3.9 million.
The Kaiser report says that there is a “substantial decline in affordability” of ACA plans between those with incomes of $45,000 (eligible for subsidies) and those with incomes of $50,000 (not eligible).
- In about one fifth of counties, a 40-year-old making $50,000 would have to pay more than 10 percent of their income for the cheapest plan available through the Affordable Care Act’s exchanges (those counties tend to be rural, so they represent just 8 percent of total ACA marketplace enrollees).
- Across much of the country, a 60-year-old making $50,000 would have to pay more than 20 percent of their income for the cheapest plan available. Nebraska is the most extreme example: “in the 28 Nebraska counties with the highest premiums, a 60-year-old making $45,000 would pay nothing in monthly premiums and the same person making $50,000 would pay $1,314 (32% of income) for the lowest-cost plan,” the analysis says.
Why it matters: These details “underscore why the Trump administration and other Republicans are pushing inexpensive insurance that bypasses ACA rules and protections — and why Democrats are pursuing strategies to make ACA plans more affordable,” The Washington Post’s Amy Goldstein says.
But don’t expect real progress anytime soon: “So far, while there seems to be a consensus that individual market premiums are out of reach for some middle-class people ineligible for ACA subsidies, there is little consensus around what to do about it,” the Kaiser analysis concludes.
And lawmakers are showing little interest in trying to find that consensus. “For all the lip service lawmakers still pay to improving the Affordable Care Act, there’s little path forward this year for any bipartisan legislation to improve the affordability of plans,” the Post’s Paige Winfield-Cunningham reports. “It’s like Democrats and Republicans are still residing on totally different planets when it comes to the ACA.”