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Portfolio > Economy & Markets > Fixed Income

PPACA subsidy gap hurts the moderately broke

By Allison Bell

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A close look at Commonwealth Fund survey figures shows that Americans with incomes from 250 percent to 399 percent of the federal poverty level (FPL) are still having serious trouble with medical bills.

Patient Protection and Affordable Care Act (PPACA) coverage expansion programs, PPACA benefits mandates and changes in the economy have helped the highest-income residents and low-income residents get health coverage and pay their bills.

But people in 250 percent of FPL to 400 percent of FPL category were about as likely to be uninsured in 2014 as they were in 2012, and they were a little more likely to say they were having problems with medical bills.

See also: Researchers: Health costs also hit high earners

The Commonwealth Fund, a health policy think tank, commissioned a telephone survey of 6,027 U.S. adults ages 19 and older who live in the United States. That survey took place from July 2014 through December 2014. The fund also commissioned a similar survey two years earlier.

The percentage of participants who reported being uninsured when they were surveyed dropped to 16 percent in 2014, from 19 percent in 2012. Sara Collins, a vice president at the Commonwealth Fund, and the other authors of a report on the results note that the total share of participants who reported having problems with medical bills fell to 23 percent, from 30 percent.

But the results varied by income level.

PPACA has created a new system of premium tax credit subsidies for people with incomes ranging from 133 percent of FPL to 400 percent of FPL, and “cost-sharing reduction” subsidies – subsidies that cut the amount a patient has to pay for deductibles, co-payments and coinsurance amounts – for people with incomes ranging from 133 percent of FPL to 249 percent of FPL. PPACA also created a Medicaid expansion program for very-low-income adults.

See also: Typical PPACA exchange users may be broke

The premium subsidy tax credits are much more generous for people with incomes ranging from 133 percent of FPL to 250 percent of FPL.

PPACA also has created an individual “shared responsibility” provision that requires many individuals to have a minimum level of health coverage or face the possibility that they might have to pay a penalty equal to 1 percent of their income.

The survey team did not ask survey participants why they did or did not have health coverage, but the percentage who said they were uninsured at the time of the survey dropped to 3 percent in 2014, from 5 percent in 2012, for people with incomes over 400 percent of FPL.

The uninsured rate fell to 19 percent, from 22 percent, for people with incomes from 133 percent of FPL to 249 percent of FPL, and to 26 percent, from 35 percent, for people with incomes below 133 percent of FPL.

The uninsured rate for people with incomes from 250 percent to 399 percent of FPL held steady at 11 percent.

See also: Underinsurance persisting in exchanges

Medical bill problem figures showed a similar pattern.

The share of participants who reported any problems with medical bills fell to 19 percent, from 25 percent, for the highest-income participants, and to 43 percent, from about 52 percent, for the lower-income participants, but held steady at 40 percent for people in the 250 percent to 399 percent category.

The share of participants who reported having problems getting care improved at all income levels, but not as much for the participants in the moderately broke category.

The percentage of participants who said they were unable to get specialist care when they needed specialist care, for example, fell to 6 percent for the highest earners, and to 19 percent, from 27 percent, for people in the 133 percent of FPL to 249 percent of FPL category. But, in the moderately broke category, problems with getting specialist care dropped only slightly – to 13 percent, from 15 percent.

See also: Survey: Higher-income consumers less happy with PPACA plans

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