Obamacare Premiums Unaffordable In Gap Between Medicaid Eligibility and Exchange Subsidies

In States without Medicaid Expansion, Cheapest Plan Costs at Least 14% of Income for Those in Gap

Jun 18, 2014, 09:30 ET from HealthPocket

SUNNYVALE, Calif., June 18, 2014 /PRNewswire-USNewswire/ -- HealthPocket released the findings of a major study today that examined premium affordability for 4.8 million Americans who earn too much to qualify for Medicaid in their states but earn too little to qualify for a premium subsidy under the Affordable Care Act. This group resides in 23 states where Medicaid income eligibility was not expanded and the maximum allowable income for program enrollment was less than the Federal Poverty Level.

When examining the lowest cost for an entry-level bronze health plan, the average 30 year-old in the gap between Medicaid eligibility and Obamacare subsidies would pay at least 18% of their income towards insurance premiums. Since premiums are higher for older enrollees, the premium expense was even more dramatic for older enrollees. 40 year-olds would spend at least 20% of their income on average for the lowest cost bronze plan premium, while 50 year-olds would spend 28%. The situation was worst in Wyoming where the percentage of income needed for the lowest cost bronze plan was 31% for a 30 year-old and 48% for a 50 year-old. Oklahoma, in contrast, was the state with the lowest costs for residents in the gap. A 30 year-old would pay 11% of income at a minimum for the least expensive bronze plan while a 50 year-old would pay 18%.

HealthPocket's research also found that the so-called "catastrophic plan" is not effective at providing affordable health insurance for those in the gap. The catastrophic plan was designed as a low cost option for those under age 30 or for those who could not otherwise afford health insurance. However, 30 year-olds in the gap would pay at least 14% of income on average for a catastrophic plan. 50 year-olds in the gap would need to pay 22% of their income towards premiums.

"For the nearly 5 million people ineligible for both Medicaid and Obamacare premium subsidies, health insurance costs are overwhelming even for high-deductible 'catastrophic' insurance plans," said Kev Coleman, Head of Research & Data at HealthPocket. "This group finds the current insurance market similar to the pre-reform market, one in which major public assistance is unavailable and premiums are unaffordable."

To review the findings for each state where a gap existed, see "Exchange Plans Unaffordable for People in Gap Between Medicaid and Obamacare."

HealthPocket.com is a free website that compares and ranks all health insurance plans available to an individual, family, or small business to allow consumers to make their best health plan decision and reduce their out of pocket costs. HealthPocket uses only objective data from government, non-profit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. Learn more at www.HealthPocket.com.

SOURCE HealthPocket