Millions of exchange plan enrollees are missing out on subsidies available under the Affordable Care Act because they picked a non-qualifying health plan.
Choosing a health plan is a very difficult and nerve-wracking process for some consumers under the Affordable Care Act, and Avalere Health has found that millions are missing out on cost-sharing assistance because of the choice they made.
More than 2 million exchange enrollees who are eligible for subsidies are not receiving this federal assistance because they did not select a qualifying health plan, according to a new Avalere analysis. As a result, these consumers are paying more out-of-pocket.
“Consumers are picking plans on exchanges based on premiums, rather than out-of-pocket costs,” Dan Mendelson, chief executive officer at Avalere, said. “As a result, some patients may be paying more than they need to for care. While cost-sharing reductions can help reduce what patients pay when they visit a doctor or hospital, some consumers may be unaware of the potential benefits.”
Enrollees with incomes between 100% and 250% of the federal poverty level are eligible for subsidies in addition to the tax credits that lower monthly premiums. In order to gain access to these cost-sharing reductions, consumers must enroll in a plan on the silver metal level.
However, if they enroll in bronze plans, which have lower premiums, they are missing out. A total of 8.1 million individuals enrolled in exchanges in 2015 are eligible for subsidies based on their incomes, but only 5.9 million are actually receiving these cost-sharing reductions.
These subsidies can make a huge difference to the families that receive them, according to the Kaiser Family Foundation. A report from February 2015 found that eligible consumers had sharply lower out-of-pocket costs than those who do not qualify for the subsidies.
“Additional consumer education and more sophisticated decision support tools are likely needed to ensure that all patients are accessing the benefits available under the Affordable Care Act,” said Elizabeth Carpenter, vice president at Avalere. “Specifically, consumers need tools that highlight the tradeoff between monthly premiums and out-of-pocket costs and demonstrate the benefits of cost-sharing reductions.”