Under Obamacare, Millions Of Americans Will Pay Less Than $100 Per Month For Health Insurance

by Tara Culp-Ressler

About 6.4 million Americans will be able to purchase insurance for less than $100 each month on Obamacare’s new state-level marketplaces, according to a new report from the Department of Health and Human Services. That’s because those people will be eligible for federal subsidies that will reduce the price of purchasing a plan under the health reform law.
The Obama administration calculated the expected premiums for people buying “silver” plans, which are the second-cheapest option on the new insurance marketplaces. Even though not every marketplace has announced its premium rates yet, researchers were still able to estimate those payments based on the health law’s rule for determining subsidies.
Americans who make up to 400 percent of the federal poverty level — which works out to be $94,200 for a family of four — are eligible for subsidies that ensure they’ll only pay a certain percentage of their income for a health plan. Using census data on Americans’ income levels, researchers were able to extrapolate how many of them would be paying less than $100 for monthly premiums for silver plans.
The new HHS report aligns with previous research that has found that many Americans won’t be covering the full cost of premiums for individual plans on Obamacare’s marketplaces. The Kaiser Family Foundation estimates that 48 percent of the Americans who need to buy insurance on the marketplaces will receive federal subsidies to help them afford it. That number rises even more for young Americans between the ages of 18 to 34 years old, who comprise the largest share of any age group to benefit from this cost-saving provision.
One of the persistent criticisms of the health reform law is that it will dramatically hike Americans’ premiums. But many of the reports about potential “rate shock” don’t take into account the effect of the federal subsidies. It’s difficult to predict how Obamacare will impact specific premiums in every state, but it is important to remember that the plans being created under the health law are brand new. They won’t necessarily be comparable to the insurance that Americans currently have, because Obamacare’s marketplaces will require each plan to meet a set of requirements to ensure they provide adequate coverage.
In addition to subsidized plans on the marketplaces, other Americans will end up paying less than $100 for their insurance because they will qualify for Medicaid under their state’s expanded program. Obamacare’s Medicaid expansion is optional, and the HHS report calculated the effect it will have in the 25 states that have so far indicated they will accept it. In that half of the country, about 12.4 million uninsured Americans will pay less than $100 each month — and many of them will pay nothing at all — to participate in the public health insurance program.
Between federal subsidies and increased Medicaid enrollment, more than half of the Americans who are currently uninsured won’t need to pay more than $100 per month to begin accessing health coverage under Obamacare, according to HHS Secretary Kathleen Sebelius.