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Free Exchange Plan Options Are Available to Many Low-Income Consumers for 2020

Summary

New analysis from Avalere finds that over 96% of counties with exchanges operated by HealthCare.gov have free plan options for low-income consumers.

The percentage of counties with free plans increased from 95% to 96% from 2019 to 2020, maintaining the option to enroll in a $0 premium bronze plan for low-income enrollees (at 150% of the federal poverty limit [FPL] or below) in Healthcare.gov states.

Consumers in Healthcare.gov states also have access to free silver and gold plans as well. Highly subsidized enrollees have free silver plan options in 25% of counties (down from 32% in 2019), and free gold plan options in 23% of counties (down from 25% in 2019).

“Many enrollees can continue to find free plans with comprehensive coverage,” said Chris Sloan, associate principal at Avalere. “However, due to lower premiums, there are fewer free silver and gold plans available in 2020.”

Figure 1: Percentage of Healthcare.gov Counties with Free Subsidized Options by Metal Level, Individual at 150% FPL, Age 50, 2019-2020

Figure 1: Percentage of Healthcare.gov Counties with Free Subsidized Options by Metal Level, Individual at 150% FPL, Age 50, 2019-2020

Overall, exchange premiums are relatively stable across the nation and even decreasing in some areas. As the premium of the second-lowest silver plan, or “benchmark” plan, declines in a region, so too do the premium subsidies available for consumers. The lower subsidy amounts often translate into fewer silver and gold plans available to low-income consumers.

Avalere analysis found that in 2020 there were 19,161 instances of free plans offered in counties in Healthcare.gov states for low-income consumers earning 150% of the FPL or less. With subsidies tied to premiums of the second-lowest cost silver plans, consumers may be able to significantly reduce or eliminate their monthly premium by applying the subsidy to bronze plans, which typically have lower premiums than silver or gold plans. However, importantly for consumers, bronze plans also have higher out-of-pocket costs in the form of deductibles and coinsurance.

Figure 2. Number of Available Fully Subsidized Premium Plans in Healthcare.gov States by County, Individual at 150% FPL, Age 50, 2020

Figure 2. Number of Available Fully Subsidized Premium Plans in Healthcare.gov States by County, Individual at 150% FPL, Age 50, 2020

Methodology

To conduct the analysis, Avalere utilized the recently released 2020 Individual Market HHS Landscape Files of exchange plan premiums in 38 Healthcare.gov states. Avalere then calculated the expected advance premium tax credits (APTCs) in each of the 2,705 counties in these states, by income, for a 50-year old non-smoker at 150% FPL, using the second lowest silver plan in each region. This subsidy amount was then applied to each bronze, silver, gold, and platinum plan in counties served by Healthcare.gov to determine the number of “free” plans available to subsidized consumers of different income levels. Avalere used the most up to date Internal Revenue Service (IRS) determinations of subsidy eligibility and the 2019 Federal Poverty Level (FPL) Guidelines for all states. Additionally, Avalere used the Alaska-specific and Hawaii-specific federal poverty guidelines for the analysis of Alaska’s and Hawaii’s health plans.

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