- Jim Bourg/Reuters
Millions of American are leaving money on the table when buying health insurance, according to the Department of Health and Human Services.
People who do not receive insurance from their employer or a government-sponsored plan such as Medicaid or Medicare are currently able to get individual insurance through the exchanges set up by the Affordable Care Act, the healthcare law better known as Obamacare, or they can buy coverage directly from a private health insurer.
The advantage of going through the Obamacare exchanges, or marketplace, HHS said, is that buyers there could qualify for income-based federal subsidies that can alleviate some of the cost of premiums.
“We estimate that about 2.5 million individuals currently purchasing individual market coverage off-Marketplace have incomes that could qualify them for tax credits,” the HHS report said. “If these individuals instead purchased qualified health plans (QHPs) through the Marketplace, tax credits that could cover part of the cost of their premiums would be available.”
To qualify, a household of four must make less than $100,000 in income, HHS said. Today, roughly 6.9 million people buy individual health insurance off-marketplace, meaning about a third of those not on the marketplace could receive some relief.
Additionally, HHS estimated that most Americans who do not have insurance would qualify for a discount from the federal government.
“In addition to those already covered in the individual market, we estimate that 10.7 million uninsured individuals are eligible for Marketplace coverage, and that 9.0 million of them (84 percent) may qualify for tax credits based on having incomes below 400 percent FPL,” the report said.
The states with the most people with off-marketplace insurance plans were California (313,000 people with off-marketplace plans that could receive subsidies), Texas (252,000), Florida (153,000), North Carolina (138,000), Illinois (130,000), and Pennsylvania (111,000).
The note from HHS comes just weeks before the open-enrollment period for Obamacare, in which HHS hopes to ramp up coverage for all people, but especially young people. Getting young people onto the exchanges would help to recalibrate the pool of customers that today is older and less healthy than originally hoped for, leading to losses for some insurers.
By touting the subsidies, HHS is most likely aiming to attract reluctant people and decrease the risk in the pool of people buying Obamacare.