2 Million Obamacare Enrollees Eligible for More Financial Help

More than 2 million people with coverage on the health insurance exchanges may be missing out on subsidies that could lower their deductibles, copayments and maximum out-of-pocket spending limits, according to a new analysis by Avalere Health.

Those who may be missing out are people with incomes between 100 and 250 percent of the federal poverty level ($11,770 to $29,425 for an individual or $24,250-$60,625). Under the health law, people at those income levels are eligible for cost-sharing reductions that can substantially reduce their out-of-pocket costs. But there’s a catch: The reductions are available only to people who buy a silver-level plan.

These cost-sharing reductions are a different type of subsidy than the tax credits that help reduce the monthly premium people pay. Those are available to people with incomes up to 400 percent of the poverty level regardless of the type of plan they buy.

In its analysis of exchange income data for those enrolled in 2015 in the health insurance marketplaces, including Covered California, Avalere found that 8.1 million individuals with this coverage had income levels that should have qualified them for cost-sharing reductions. But only 5.9 million received the reductions, which are automatically applied if people enroll in silver-level plans.

Some of those who were eligible probably bought cheaper bronze-level plans, says Elizabeth Carpenter, a vice president at Avalere.

“Surveys show that people shop for plans based on premiums,” Carpenter says. “But if somebody forgoes cost-sharing reductions in order to pay a lower monthly premium and then has an unexpected accident or illness, their out-of-pocket exposure is likely to be higher.”

Silver plans pay 70 percent of medical costs, on average, while bronze plans pay 60 percent.

In other words, consumers with a silver plan are responsible for paying 30 percent of their medical costs in deductibles and copayments or coinsurance, up to a maximum of $6,600 for an individual and $13,200 for a family in 2015.

Cost-sharing reduction subsidies reduce those out-of-pocket costs to those of a gold or even a platinum plan.

If your income is within certain ranges, you could reduce your costs, as follows:

• People with incomes below $17,655 for an individual or $36,375 for a family of four are on the hook for no more than 6 percent of their costs  -- instead of 30 percent.
• Those with incomes between $17,656-23,540 for an individual or $36,376-48,500 for a family of four pay 13 percent of costs instead of 30 percent.
• Even those with slightly higher incomes pay 27 percent at most.

Consumers who are eligible for these cost-sharing reductions also have lower maximum out-of-pocket spending limits.

If you are currently enrolled in a bronze plan, but your income falls within one of the ranges above, talk with an insurance broker or certified counselor to see if you could save money by enrolling in a silver plan -- with these cost-sharing reductions.

Michelle Andrews reported this story for Kaiser Health News, a nonprofit news organization covering health care policy and politics. It is an editorially independent program of the Kaiser Family Foundation.