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Consumers Get $10B In Subsidies For Health Coverage, Study Finds

By Jenny Gold

March 27th, 2014, 4:57 AM

Americans have already qualified for about $10 billion in tax credits to help them purchase private health insurance this year through the Affordable Care Act, according to a study from the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

That’s an average of $2,890 for each of the 3.5 million people who qualified for a subsidy as of March 1 — about 83 percent of those who enrolled in an exchange plan.

But four of five Americans who could qualify for a subsidy hadn’t applied for coverage by that date. And sign-up rates varied greatly by state.  More than half of the subsidy money allotted so far will go to consumers in California, Florida, North Carolina, Texas and New York.

“States that are lagging in enrollment are leaving billions of dollars on the table that their residents qualify for,” said Larry Levitt, one of the study authors.  In Hawaii, South Dakota, Iowa, New Mexico, North Dakota, Washington, D.C., and Oklahoma, for example, 10 percent or fewer of those eligible for tax credits signed up.

If all states had been able to enroll people at the rates of the five most successful states (Washington, Connecticut, California, Rhode Island and Vermont), where an average of 39 percent of those eligible signed up, another 3.1 million people would have qualified for an additional $8.6 billion in premium subsidies.

That money could provide a valuable infusion of cash that “not only has a benefit to individuals, but also to state economies as well,” Levitt said.

The average subsidy per enrollee also varied greatly by state, from highs of $4,980 in Wyoming and $4,370 in Mississippi to lows of $1,350 in the District of Columbia and $1,780 in Utah. Those differences are the result of widely varying premium rates, as well as poverty levels and age demographics.  States with lower-income residents and older enrollees (who face higher premiums) are seeing higher average subsidies.

The figures from the study are based on sign-ups through March 1, when 4.2 million people had applied for and selected exchange plans, and do not account for people who have selected a plan but not paid the first month’s premiums. Maryland, Massachusetts and Minnesota were excluded from the report because of a lack of data.

A surge in enrollment could boost premium subsidies significantly. In mid-March, the Obama administration announced that enrollment had already exceeded 5 million people. The formal sign-up deadline is March 31, although federal and some state exchanges have relaxed that for certain categories of applicants.

2 Responses to “Consumers Get $10B In Subsidies For Health Coverage, Study Finds”

  1. hwmerritt says:

    you have a typo in your statement about how many additional people would qualify
    you probably meant to say millions and not billions

    ” another 3.1 billion people would have qualified for an additional $8.6 billion in premium subsidies.”

  2. Les Radwany CLU ChFC says:

    Do you have any way to verify 6M signups announced by the President? Cynically, I believe it’s another political lie.

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