Nearly Three-Quarters of Americans With Individual Plans Qualify for Obamacare Subsidies

By Sy Mukherjee, ThinkProgress

22 November 13

ver 70 percent of Americans under age 65 who buy insurance through the individual market will either qualify for Obamacare subsidies or the health law's expansion of Medicaid in the states that accept it, according to a new study by Families USA.

Obamacare provides insurance subsidies to Americans making up to 400 percent of the poverty level - about $94,200 for a family of four - who enroll in plans through the health law's statewide marketplaces. The new study finds that 71 percent of current individual policyholders have annual incomes that fall below this threshold. Earlier estimates by groups like the Kaiser Family Foundation (KFF) estimated that just under half of these Americans could qualify for subsidies.

Families USA's study also confirms earlier reports that the current individual market burdens consumers with uncertainty. For instance, a full "64.5 percent of consumers with individual market insurance kept that insurance for a year or less" irrespective of income, according to study authors. Many of these plans also skimp on the types of benefits that Americans actually need when they get sick, such as maternity, mental health, prescription drug, and even hospitalization coverage, while placing annual and lifetime caps on coverage. The health law has far more robust minimum coverage requirements, outlaws benefit caps, and doesn't allow insurers to drop customers or raise their premiums based on health status.

Researchers also noted that just a fraction of a percent of all non-elderly Americans have individual plans that they keep for more than a year but won't qualify for a government subsidy when they go out to buy new plans through the Obamacare marketplaces.

"[U]nder the ACA, only 0.6 percent of Americans under age 65 will be at risk of losing their current individual market plan and will not be income-eligible for financial assistance that will make their new insurance plan more affordable," concluded the authors. "Even among this 0.6 percent, some have insurers who will not or cannot cancel their plans. Others will decide that they are better off with higher-value plans in the new insurance marketplaces."