To make health coverage and care more affordable for low-income Americans lacking access to employer-sponsored insurance, the Affordable Care Act provides financial assistance to help consumers pay for premiums and cost-sharing requirements in marketplace (exchange) plans. To receive this financial support, individuals must purchase a qualified health plan—a silver-tier plan. Many of those eligible for assistance, however, fail to do so.
What the Study Found
In 2014, Commonwealth Fund–supported researchers surveyed a sample of Californians who had enrolled in individual plans to investigate their choices. The researchers found that:
- Some 14 percent of consumers who would have been eligible for both premium and cost-sharing assistance purchased plans off the insurance exchange, thereby forfeiting both.
- Twenty percent purchased non-silver plans on the exchange and thus received premium assistance only. Most purchased less generous but less expensive bronze plans.
- In all, 31 percent of those eligible for either premium assistance, cost-sharing assistance, or both chose plans that did not come with such help.
Even though most enrollees reported having received some guidance in purchasing their plan, many made poor choices that resulted in higher costs. Those who missed opportunities to receive financial assistance were two to three times as likely to say they had difficulty in paying premiums and out-of-pocket costs compared with those who received subsidies.
Even if the ACA subsidies are repealed and replaced by refundable tax credits, as proposed by some Republican lawmakers, consumers will still need to make informed plan choices. Additional efforts may be needed to educate consumers and steer them toward the highest-value plans.