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ACA subsidies cut many Connecticut exchange users' net costs

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In Connecticut, what typical people pay for public exchange plan health coverage has been falling.

Managers of Access Health CT, a state-based Affordable Care Act exchange, say ACA subsidy programs have wiped away the effects of premium increases for many of the subsidy users who have renewed their coverage.

Related: Net ACA exchange plan premiums may fall for many

The ACA exchange system offers a premium tax credit subsidy program for Connecticut residents who earn from 100 percent to 400 percent of the federal poverty level. In Connecticut, the premium subsidies are available to individuals with “modified adjusted gross income” levels of $11,880 to $47,520.

The exchange system also offers a cost-sharing reduction subsidy program for state residents who earn less than 250 percent of the federal poverty level. That program helps eligible exchange users with deductibles, co-payment requirements and coinsurance bills.

The effects of the ACA subsidy programs have created a big gap between premium increases for Connecticut residents who qualify for the subsidies and Connecticut residents who don’t.

About 9,455 of the residents who have been using exchange plan coverage this year have already decided to keep their coverage in 2017, according to an enrollment presentation.

For the relatively high-income exchange users who have to pay all of the bills themselves, the average monthly premium has increased 19 percent, to $477.

For middle-income users, who qualify for the premium subsidy but not help with cost-sharing bills, the average premium has increased 20 percent, to $631. But the subsidy has reduced the average amount those users actually pay out of pocket for the renewal coverage 1.1 percent, to about $214.

For the lowest-income users, who qualify for both premium subsidy and the cost-sharing reduction subsidy, the average premium has increased 19 percent, to $630. But the premium subsidy has reduced the average amount of cash those users really pay for their coverage by 3 percent, to $89.

 ACA exchange cost details

The ACA open enrollment period for individual major medical coverage started Nov. 1, and is set to run through Jan. 31.

The enrollment period is still young, so Connecticut exchange managers are not yet publishing clear-cut year-over-year enrollment comparison figures.

The 2016 Connecticut exchange users who have rushed to renew their coverage might be the ones lucky enough to enjoy the lowest net cost increases.

Connecticut exchange managers have not given much information about the 2,637 2016 exchange plan users who decided to drop their coverage.

Some of the coverage droppers might get 2017 coverage from Medicaid, an employer or Medicare. Others might have looked at sky-renewal rates, cried, and decided to go without health coverage in 2017.

Another issue is that the monthly net cost figures in the Connecticut exchange presentation are simply averages. Many of the exchange users renewing their coverage will see net cost increases that are higher than the average increase.

But exchange managers say that about 87 percent of the subsidy users who have already renewed their coverage will face net monthly cost increases of $30 or less.

Exchange managers in Colorado have also reported evidence that the ACA subsidy program may lead to reductions in net monthly exchange coverage costs for many exchange users in that state in 2017, in spite of insurers’ moves to increase their premiums by 20 percent or more.

For now, the Affordable Care Act provides more than enough funding to cover the cost of the premium subsidies, because private small-group plan enrollment has been higher than the ACA designers expected, use of ACA plan subsidies has been lower than expected, and the ACA exchange plan premium increases for 2014 and 2015 were much lower than the ACA designers had expected.

In the long run, however, exchange plan users face two major problems.

One is that Donald Trump, the president-elect, and many of the Republicans serving in Congress have promised to repeal and replace the ACA. It’s not clear what would happen to the ACA exchange system and the ACA premium subsidy system if the Republicans succeed at repealing, replacing or changing the ACA.

Another challenge is that, starting in 2019, if the combined cost of the premium and cost-sharing reduction subsidies is more than 0.54 percent of gross domestic product, then further increases in subsidy spending would be tied to the overall inflation rate.


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