Recent data indicate that a large number of enrollees didn’t access health insurance cost-sharing reductions available under the Affordable Care Act (ACA). Why did this happen? How can families get more help paying for health coverage?
Under the ACA, people with family incomes between 100 percent and 250 percent of the Federal Poverty Level (FPL) are eligible for various levels of “cost-sharing reductions” (CSRs) to reduce the amount they must pay in out-of-pocket costs (e.g., deductibles, co-insurance, co-payments and out-of-pocket maximums). The CSRs are available only if a person or family enrolls in a “Silver” plan through the health insurance Marketplace in their state. People eligible for CSRs who enroll in a Silver plan will automatically receive a version of the plan that has lower deductibles, out-of-pocket maximums, copayments and/or coinsurance. The version of the Silver plan, and therefore the degree to which cost-sharing is reduced, will be based on family income level; lower income people will be assigned to plans with lower out-of-pocket costs. Specific cost-sharing charges will vary from Silver plan to Silver plan. In most states, insurers have significant flexibility to set these charges.
Although Silver plans have higher premiums than Bronze plans, the overall costs of Silver plan coverage (premiums plus out-of-pocket costs) might be cheaper when CSRs are taken into account.
Health consulting firm Avalere Health found that over 2 million enrollees in the federal Marketplace did not take advantage of cost savings available to them.[i] Researchers are looking for reasons this happened. A recent Georgetown University blog noted that “Only Silver-level plans qualify for cost-sharing reductions but the Avalere analysis indicates that more than a quarter of enrollees – 2.2 million people – with qualifying income did not choose Silver plans.” The analysis suggests that consumers are likely enrolling in lower-cost Bronze plans. In fact, the data show that “27 percent of CSR [cost-sharing reduction]-eligible people are not enrolled in Silver plans,” indicating the need for more tools and assistance to make consumers aware of how to get cost-sharing reductions.
How can families be made aware?
As most families are enrolling directly, some suggestions include:
Ø “Pop-ups” on both state and federal Marketplace websites could provide warnings that a different level plan could lower out-of-pocket costs.
Ø Renewal forms could note that the enrollee is eligible for cost-sharing reductions.
Ø Phone staff in Marketplaces could let families know about cost-sharing reductions.
What Kinds of Tools Would Address This?
“Specifically, consumers need tools that highlight the tradeoff between monthly premiums and out-of-pocket costs and demonstrate the benefits of cost-sharing reductions,” said Elizabeth Carpenter, vice president at Avalere. HealthCare.gov has a webpage on how to save on out-of-pocket costs (see Resources), but it doesn’t address the tradeoffs between premiums and cost-sharing. There is also an explanation on CSRs on the Health Reform: Beyond the Basics website which may be helpful to navigators, but isn’t particularly “family-friendly.” The good news is that CMS (Centers for Medicaid and Medicare Services) is developing a tool to help consumers understand any potential tradeoffs between monthly premiums and out-of-pocket costs for plans at different metal levels and with different plan designs.[ii] This new tool will be available during the next open enrollment period for coverage effective January 2016.
®How to save on premiums: https://www.healthcare.gov/lower-costs/save-on-monthly-premiums/
®How to save on out-of-pocket costs: https://www.healthcare.gov/lower-costs/save-on-out-of-pocket-costs/
®Detailed explanation of cost-sharing reductions: http://kff.org/health-costs/issue-brief/cost-sharing-subsidies-in-federal-marketplace-plans/
®Health Insurance Marketplace Calculator: http://kff.org/interactive/subsidy-calculator/
®Consumer Assistance and Tools Needed to Ensure that All Eligible Marketplace Enrollees Get Cost-Sharing Reductions: http://ccf.georgetown.edu/all/consumer-assistance-tools-needed-ensure-eligible-marketplace-enrollees-get-cost-sharing-reductions/
This tip sheet is based on an ACA blog authored by Lauren Agoratus, M.A. Lauren is the parent of a child with multiple disabilities who serves as the Coordinator for Family Voices-NJ and as the southern coordinator in her the New Jersey Family-to-Family Health Information Center, both housed at the Statewide Parent Advocacy Network (SPAN) at www.spanadvocacy.org. More of Lauren’s tips about the ACA can be found on the website of the Family Voices National Center for Family/Professional Partnerships: http://www.fv-ncfpp.org/.