By now, I think most people know that the sticker price on Exchange insurance policies is not the price most people will pay for their policy. Most people know that subsidies are available to lower the out of pocket monthly premium price for the working middle class. However, there is another class of subsidies that I don’t think a lot of people know about. These subsidies apply to out of pocket expenses for Exchange Silver plans that transform the Exchange Silver into better plans.
The Center for Budget and Policy Priorities has a good one paragraph summary of these out of pocket/cost sharing subsidies:
The premium credits allow people to buy a silver plan, which has a 70 percent actuarial value. That means that the plan will cover 70 percent of the costs for covered medical services of a typical beneficiary population, with beneficiaries, on average, paying the other 30 percent. However, people who receive cost-sharing assistance — those with incomes below 250 percent of the poverty line — will not have to pay the full remaining 30 percent of the cost of covered services. As a result, people with incomes below 250 percent of poverty will effectively be enrolled in a plan that has a higher actuarial value than 70 percent. For example, people with incomes below 150 percent of the poverty line will have plans that have an actuarial value of 94 percent, while plans for people with incomes between 150 percent and 200 percent of the poverty line will have an actuarial value of 87 percent. These higher actuarial values mean that as a result of cost-sharing assistance, low-income individuals and families will be able to enroll in health plans with lower deductibles, co-payments, and/or total out-of-pocket costs.
It is a sliding scale. People who barely breaking even get 80% off their out of pocket responsibilities. For instance, a family on a Silver Plan with a $3000 listed deductible would only be responsible for $600 of the deductible. I think the family is still on the hook for the $600 instead of transforming the deductible into a sliding scale co-insurance. A family making just under 250% of federal poverty line would get a 10% discount on their out of pocket expenses. These subsidies transform a Silver plan for a family making under 150% of FPL into a Platinum plus plan, and for families making between 150% to 200% FPL, their Silver plans get transformed into very good Gold plans to weak Platinums.
Oh yeah, as a FYI to the Medicare for All folks, Medicare currently has an actuarially value of 82% to 83%. That number increases with low income subsidies on Medicare Part D but the combination of premium subsidies and out of pocket subsidies gets quite a few people who making less than 250% of FPL coverage that is far better than Medicare Part A and B combined.