Millions of American are leaving money on the table by buying insurance outside of Obamacare’s exchanges, according to the Department of Health and Human Services (HHS).
Currently, people who do not receive insurance from their employer or a government-sponsored plan such as Medicaid or Medicare can get individual insurance by going through exchanges established by the Affordable Care Act (ACA), better known as Obamacare, or they can buy coverage directly from a private health insurer.
The advantage of going through the Obamacare exchanges, said the HHS, is that buyers are then qualified for federal subsidies depending on their income that can alleviate some of the cost of premiums.
“We estimate that about 2.5 million individuals currently purchasing individual market coverage off-Marketplace have incomes that could qualify them for tax credits,” said the report from the HHS. “If these individuals instead purchased qualified health plans (QHPs) through the Marketplace, tax credits that could cover part of the cost of their premiums would be available.”
In order to qualify, a household of four must make less than $100,000 in income according to the HHS. Currently, roughly 6.9 million people buy individual health insurance off-marketplace, meaning around one-third of those currently not on the marketplace could receive some relief.
Additionally, HHS estimated that almost all of the Americans currently without insurance would qualify for a discount from the federal government as well.
“In addition to those already covered in the individual market, we estimate that 10.7 million uninsured individuals are eligible for Marketplace coverage, and that 9.0 million of them (84 per cent) may qualify for tax credits based on having incomes below 400 per cent FPL,” said the report.
The states with the most people off of the marketplace were California (313,000 people with off-marketplace plans that could receive subsidies), Texas (252,000), Florida (153,000), North Carolina (138,000), Illinois (130,000), and Pennsylvania (111,000).
The note from HHS comes just weeks before the open enrollment period for Obamacare, in which HHS hopes to ramp up coverage for all people, but especially young people. Getting young people onto the exchanges would help to recalibrate the pool of customers that is currently older and less healthy than originally hoped for, leading to losses for insurers.
By touting the subsidies, HHS is most likely aiming to attract reluctant people and decrease the risk in the pool of people buying Obamacare.