Health Reform WK-EDGE Uninsured failing to take advantage of zero- or low-premium policies through HealthCare.gov
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Wednesday, April 7, 2021

Uninsured failing to take advantage of zero- or low-premium policies through HealthCare.gov

By Robert B. Barnett Jr., J.D.

The purpose of the issue brief is to raise awareness about the current availability of zero- and low-premium plans for many uninsured and underinsured people.

More than half of the uninsured non-elderly adults in the U.S. would qualify for a zero- or low-premium ($50 or less per month) through HealthCare.gov, if they chose to pursue that option, according to an issue brief by HHS’s Office of the Assistant Secretary for Planning and Evaluation. Furthermore, changes made by the recently enacted American Rescue Plan, which will go into effect on April 1, 2021, are expected to drive that number even higher, although how high cannot yet be determined (ASPE Issue Brief, March 29, 2021).

Individuals frequently state that they remain uninsured because of the high costs of health insurance coverage. The issue brief discovered, however, that 42.5 percent of the uninsured may have access to a zero-premium plan and that 56.8 percent may have access to a low-premium plan for $50 or less per month. Premiums, of course, are but one of the costs of maintaining health insurance coverage. Those who enroll in an insurance plan can also face additional out-of-pocket costs, including deductibles, co-pays, and coinsurance. In fact, some zero- or low-premium plans have higher cost-sharing than higher premium plans.

The key to obtaining the low-cost health insurance options is marketplace financial assistance, most notably the advanced premium tax credit (APTC) payments. APTCs are available to eligible individuals and families with household incomes between 100 and 400 percent of the federal poverty line in states that have not expanded Medicaid under the ACA and between 138 and 400 percent of the federal poverty line in states that have expanded Medicaid. Thus, for many low-income individuals, APTCs through HealthCare.gov are large enough to reduce premiums substantially, in some cases down to zero. The credits are based on the premium of the benchmark plan (the second-lowest cost silver plan) available through HealthCare.gov in a person’s area of residence.

ARP. The American Rescue Plan should further increase and expand eligibility for ACA premium subsidies in several ways. First, it includes a provision that says that those individuals with less than 400 percent of the federal poverty line, who already qualify for APTCs, receive a reduced percentage of household income contribution toward benchmark premiums, including a reduction to 0 percent for those with household incomes between 100 to 150 percent of the federal poverty line. Second, those with incomes above 400 percent of the federal poverty will be eligible for APTCs that cap their premium contribution at no more than 8.5 percent of their household income. Third, individuals who received unemployment compensation during any week of 2021 will be deemed to have an income not in excess of 133 percent of the federal poverty line for purposes of calculating eligibility for APTCs and cost-sharing reductions. In addition, as the result of the COVID-19 pandemic, a Special Enrollment Period was established in the 36 states served by the federal Marketplace on HealthCare.gov, which created a new enrollment period that will run through August 15, 2021.

Stakeholders hope that publicizing the availability of these zero- and low-premiums plans will encourage the uninsured to become insured. When the Special Enrollment Period was created and announced, 385,864 individuals requested coverage in the first two weeks.

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