Middle-class, older adults who don't qualify for federal subsidies, especially those living in rural areas, face the highest Affordable Care Act plan costs, according to a new Kaiser Family Foundation report.
The report of bronze ACA marketplace plans discovered that rural Nebraska counties have the least affordable ACA plans for middle-aged adults not eligible for subsidies. A 60-year-old person in Lincoln County, Nebraska, making $50,000 annually pays a monthly premium of $1,314 for the lowest-cost plan — 32% of income — compared to a person in that same county who makes $45,000 and pays no monthly premiums for the same coverage because they qualify for subsidies.
KFF found that 21% of counties across the country are areas in which a 40-year-old making $50,000 a year spends more than 10% of income on the cheapest ACA plan. However, there's a vast difference between urban and rural areas. KFF said 25% of counties in non-metropolitan regions for the same age and income pay more than 10% of income on premiums. That's true in only 5% of metropolitan counties.
KFF said the so-called subsidy cliff, which is at 400% of the federal poverty line, means people making only a few thousand dollars more than their peers are paying exponentially more for health insurance. For an individual, 400% of the poverty level is $48,560. For a family of four, it's $100,400.
Middle-aged adults face higher premiums. The ACA lets payers charge middle-aged people premiums that are three times higher than younger people. This difference disproportionately affects middle-aged people who don't qualify for subsidies, especially those in rural areas such as Wyoming. That state has the highest average statewide premium for middle-class people who aren't eligible for subsidies. Rhode Island has the lowest.
NEW analysis: ACA exchange premiums can be unaffordable for those who don't get a subsidy. Our interactive maps & charts illustrate who faces the biggest affordability challenges: older adults, rural enrollees, and those just above the subsidy cut-off. https://t.co/Jdpf1ji9LT pic.twitter.com/8iixmz7LYx— Cynthia Cox (@cynthiaccox) March 5, 2019
The KFF report comes as payers have largely found stability in the ACA marketplace. That's evident by the modest premiums increases in 2019.
However, as the report shows, unsubsidized ACA plans still can cause hefty premiums. In addition to subsidies for ACA plans, more than three dozen states have expanded Medicaid, which provides coverage for people up to 138% of the federal poverty line.
So, in effect, the ACA has helped expand affordable coverage for lower-income Americans, but middle-class and upper-middle-class people are still struggling with expensive coverage.
Americans have more health plan options this year, as the Trump administration expanded low-cost short-term plans. However, those plans can also limit services and can result in large out-of-pocket costs, along with potentially driving healthy people out of the exchanges and correspondingly raising premiums in the individual market.
Middle-aged people who don't qualify for subsidies still struggle to find affordable health insurance. Short-term plans may interest younger people with few healthcare needs, but don't provide adequate health coverage for people who regularly visit the doctor.
KFF suggested expanding premium tax credits to help those people. The report pointed to California, which recently proposed tax credits for people up to 600% of the poverty level. That equals $72,840 for an individual. There are also multiple proposals on Capitol Hill.
"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," KFF said.