Analysts at the U.S. Government Accountability Office (GAO) have shown how individual and family major medical coverage is for families with moderately high incomes.
The analysts prepared the Patient Protection and Affordable Care Act (PPACA) affordability study to carry out an affordability report provision included in PPACA.
The PPACA exchange system now provides exchange plan subsidies for exchange users who earn less than 400 percent of the federal poverty level (FPL). In most of the country, the 400 percent of FPL cut-off is $47,080 for a one-person household and $97,000 for a family of four. The cut-off is the same in the New York City area, where the median home had a value of $412,500 in the period from 2010 through 2012, according to Census Bureau data, and Pittsburgh, where the median home had a value of $124,300.
PPACA imposes a penalty on many taxpayers who can afford “minimum essential coverage” (MEC) and fail to have coverage. But PPACA exempts taxpayers who would have to pay more than 8 percent of their income for MEC from having to pay the penalty.
PPACA prohibits insurers from using personal information other than tobacco use when pricing coverage, but it lets them charge older insureds three times as much as they charge younger insureds.
The GAO looked at what three hypothetical households over the 400 percent of FPL threshold would have to pay for the cheapest bronze plans available in their communities.
The analysts found that a single 27-year-old even earned just 450 percent of FPL could get the cheapest bronze coverage for less than 4 percent of income in 53 percent of the country, and that most 27-year-olds with income over 400 percent of FPL could get coverage for less than 8 percent of income in most of the country.
At the over-400-percent-of-FPL level, a couple with two 40-year-old spouses and two children could get the cheapest bronze coverage for 4 percent to 8 percent of income in most of the country. Couples at 450 percent of FPL might have to pay 8 percent to 12 percent of income in 25 percent of the rating areas.
A single 60-year-old with income over the 600 percent of FPL threshold could buy bronze coverage costing less than 8 percent of income in most markets. But, at the 500 percent of FPL, that consumer would have trouble finding affordable bronze coverage in 72 percent of the country. At 450 percent of FPL, the consumer could find affordable coverage in only about 14 percent of the country.
A bronze plan covers only 60 percent of the actuarial value of the PPACA essential health benefits package, and the cheapest bronze plans often have narrow networks, no out-of-network coverage, no in-network providers outside of the enrollee’s community, and deductibles of $6,600 for an individual and $13,200 for a family.