Health exchange coverage premiums and cost-sharing could cost a family of 4 with an annual income of $102,000 19% of its income.
The Congressional Budget Office has posted that figure in a newly released table based on the health exchange provisions in the “chairman’s mark” of the America’s Healthy Future Act bill. Senate Finance Committee staffers developed the draft under the direction of Senate Finance Committee Chairman Max Baucus, D-Mont. The bill authors have proposed using a health exchange system to make subsidized health coverage available to low-income and middle-income consumers.
In the table, analysts at the CBO and the Joint Committee on Taxation, another congressional research arm, look at the subsidies and insurance rates that might be available through the health exchange system in 2016.
The analysts assess the affordability of low-end, “silver option” coverage for consumers in each income range up to 450% of the federal poverty level.
The current version of the AHFA bill draft calls for the government to provide both premium subsidies and cost-sharing subsidies for individuals and families with incomes under 200% of the federal poverty level.
Only premium subsidies would be available to individuals with incomes of 200% to 350% of the federal poverty level and families with incomes of 200% to 400% of the federal poverty level.
The CBO and JCT analysts assume that, in 2016, the federal poverty level will be $11,800 for a single person and $24,000 for an individual.
For an individual, all subsidies, including premium subsidies, would end at an annual income level of $41,300.
For a family of 4, the cut-off would be $96,000.
For an individual with an income of 375% of the federal poverty level – someone who just missed the subsidy cut-off – premiums would be $5,000 per year, the average amount of cost-sharing would be $1,700 per year, and premiums and cost-sharing combined would amount to 15% of income, the analysts estimate.
For an individual with an income of 425% of the federal poverty level, premiums and cost-sharing would average 13% of income.
For a family of 4 with an income of 375% of the federal poverty level, premiums would be $11,500, cost-sharing would be about $5,100, and total premium and cost-sharing costs would eat up 18% of income.
For a family of 4 with an income of 425% of the federal poverty level, premiums would be $14,700, cost-sharing would be $5,100, and costs would consume 19% of income, the analysts estimate.
The analysts also are predicting that households earning less than 400% of the federal poverty level would end up paying about 62% of the penalties imposed on consumers who fail to buy adequate health coverage.
In 2008, half of all U.S. households of all sizes earned more than $55,000 per year, and a quarter earned more than $96,000, according to the Census Bureau.