Affordable Care Act
Obamacare Premiums Unaffordable for Many Middle-Income People in 2019
Updated on November 13, 2019
Many middle-income Americans are having a difficult time affording their Obamacare premiums.
In a recent study conducted by the Kaiser Family Foundation (KFF) found that while premiums for ACA marketplace plans have mostly held steady (with the 2018 average for family coverage being $1,191 and the 2019 average being $1,154, according to eHealth), middle income Americans are still having trouble affording their coverage.
According to healthcare.gov, 2019 health insurance is unaffordable if it costs more than 9.89% of a household’s modified adjusted gross income (MAGI) to pay for the lowest cost plan possible.
The FPL and the “subsidy cliff”
Those who make between 100% and 400% of the federal poverty line (FPL) may be eligible for ACA subsides to help pay their premiums and, in some cases, their out of pocket expenses (such as copayments and deductibles). If you fall outside of this, even if it’s just making 401% of the FPL, then you might find yourself falling off the subsidy cliff.
2018 Poverty Guideline for the 48 Contiguous States and the District of Columbia
|Persons in Family/Household||100% of Federal Poverty Line||200% of FPL||300% of FPL||400% of FPL|
2018 HHS poverty guidelines which the Federal Reister published on January 18,2018. Elligability for ACA subsides for 2019 are based on these guidelines.
Those who make above 400% of the federal poverty line (FPL) and who aren’t eligible for premium tax credits are dealing with something called the “subsidy cliff”, which refers to how there is a steep drop off in government assistance. There is no subsidy phase out for those making 401% and above the FPL.
This means that people making just over 400% of the FPL are completely responsible for the full cost of their insurance premiums.
“If you qualify for Obamacare subsides, you may be happy with your health insurance premiums – but the fact is that, for some families, earing just a couple hundred dollars more per year can make you ineligible for subsides and raise your health insurance costs by thousands of dollars,” said eHealth CEO Scott Flanders. This means, those couple extra dollars could cost you hundreds, or even thousands, due to not getting subsidies for your ACA health insurance plan.
Shopping outside of state/federal marketplaces
If you find yourself falling off the subsidy cliff (or find that ACA insurance plans are too expensive for any other reason), you’re probably going to benefit from a private marketplace like eHealth. On our online marketplace, we offer ACA plans along with many other alternatives that you’ll likely find are more affordable. Keep in mind, a more affordable health insurance plan will likely mean less benefits are covered, but being covered by a plan with less benefits is probably a better option than not being able to afford health insurance at all. Whether it’s due to the subsidy cliff, or something else, many middle-income individuals and families are shopping outside of government exchanges to find their insurance.
Private exchanges – such as eHealth – offer a wider selection of health insurance plans than government exchanges. Some people may find they can save money by buying an off-market plan through a private exchange.
It takes as little as providing your zip code to get quotes on all different kinds of plans at eHealth. You’ll find that it’s incredibly easy to compare prices for plans with eHealth, in order to find something that is right for your health care needs and budge
Opting for short term health insurance
Another option people are looking into is short term health insurance plans. These plans offer coverage for short amounts of time (anywhere from a few months to a year, with the chance to renew, depending on where you live) at a lower rate than most major medical plans.
According to eHealth, there has been an increase in people interested in buying short term health insurance rather than buying ACA coverage.
Keep in mind that these plans offer less coverage than most major medical plans and may not cover the 10 essential benefits ACA plans are mandated by law to cover. However, if you do opt to purchase a short term health insurance plan you will not incur a tax penalty at the federal level as the individual mandate tax penalty no longer applies from 2019 on.
If you are interested in a short term plan, eHealth carries over 3,600 plans from over 16 carriers.
Start your health insurance plan comparison journey instantly with free quotes on eHealth.