By John Reichard, CQ HealthBeat Editor
November 27, 2013 -- Here's the bad news about the people who have signed up so far for the insurance plans sold on the federal and state exchanges that opened Oct. 1 under the 2010 health law: Relatively few took up subsidies to help pay their premiums.
Here's the good news about those new enrollees: Relatively few took up subsidies to help pay their premiums.
Only 30 percent of exchange applicants as of Nov. 2 were eligible for federal subsidies to lower their premiums and cut out-of-pocket medical costs, according to an analysis released this week by Washington consulting firm Avalere Health. That's far below the 84 percent of exchange enrollees that the consulting firm projects will ultimately turn out to be eligible for those subsidies.
The low figure suggests the word just isn't getting out to people who could qualify for financial help. That's bad news for the law's proponents, who expected the subsidies to drive millions of Americans to get coverage, particularly the young and healthy whose relatively low medical costs would make it possible for older and sicker Americans to find affordable coverage on the new marketplaces.
But it's good news too, says Avalere CEO Dan Mendelson.
"The figures show the potential for increased exchange enrollment in the coming weeks as we get closer to the deadline for 2014 insurance," Mendelson says. "As lower-income Americans determine that they have access to subsidized commercial insurance products, we can expect to see many enroll to save money."
As of Nov. 2, a total of 106,000 people nationwide had enrolled in health plans through the federal exchange site healthcare.gov and state exchanges, Avalere noted, citing data from the Health and Human Services Department. "However, nearly 1.1 million individuals had applied and been deemed eligible for coverage."
Among those, 30 percent were eligible for subsidies, meaning they had incomes below 400 percent of the poverty line, with 84 percent of final exchange enrollees ultimately projected to qualify.
Subsidy eligibility among visitors to the marketplaces was higher on the federal exchange than on state exchanges, which is perhaps surprising since states are thought to be more active in promoting the new coverage options under the health law (PL 111-148, PL 111-152). The percentage found to be subsidy eligible on state exchanges was 23 percent compared to 34 percent at the federal exchange.
HHS says exchange customers must enroll in plans by Dec. 23 and pay by Dec. 31 in order to have coverage that starts Jan. 1.
A stronger advertising and outreach campaign next month could boost awareness of subsidies and sign-up rates. But the Obama administration faces a delicate balancing act because it doesn't want to crash problem-plagued healthcare.gov given its history of becoming easily overloaded.
Figures released Nov. 21 by California's exchange, among the nation's most successful, also showed that people who completed coverage applications in many instances were not eligible for subsidies. State data showed that 30 percent were eligible for subsidies, 31 percent were non-subsidized and 39 percent appeared to qualify for Medicaid. English was by far the predominant language of applicants.
"The enrollment numbers so far reflect a tremendous demand for health insurance, which will only grow stronger as the facts about Covered California health coverage options spread across California's diverse communities of language and culture," said Peter Lee, director of the state's exchange.