The Kaiser Family Foundation (KFF) has released a new study examining the effects that Obamacare’s insurance subsidies will have on Americans who currently own individual health plans — and it’s great news for consumers.
Individual health policies under Obamacare will offer more robust benefits than typically-skimpy coverage that Americans can buy now. Using government projections and insurance company data, KFF estimates that the average yearly insurance premium for a family under the second-cheapest, mid-level “Silver” plan on an Obamacare marketplace will be $8,250 (although those rates will vary depending on geographic location and age). But government subsidies authorized by the health law will help a full 48 percent of the Americans with individual health plans afford insurance. Those subsidies will cover an average of $2,672 out of individual policyholders’ total premiums:
CREDIT: Kaiser Family Foundation
It’s important to note that those numbers are an average across all individual plan holders, including those who make too much money to qualify for federal subsidies. Obamacare provides this financial assistance to Americans who are between 138 percent and 400 percent of the Federal Poverty Level.
Among subsidy-eligible families, the government would provide an even larger average tax credit of $5,548 per year, according to KFF. That would cover a full 66 percent of these poorer families’ premiums. Healthier Americans that qualify for the assistance and choose to enroll in a cheaper, bare-bones “Bronze” level plan would benefit further, with subsidies paying for 77 percent of their premiums. As Project Millennial’s Adrianna McIntyre points out, an even larger number of young Americans — between 65 and 70 percent of young adults who have individual health plans — will qualify for Obamacare subsidies since they tend to make less money:
CREDIT: Project Millennial/Adrianna McIntyre
That’s a far cry from the doomsday scenario that Obamacare critics paint about the law’s effect on insurance rates, particularly for the young. Many insurance departments in GOP-led states have misleadingly claimed that the health law will extravagantly hike health care premiums. But these officials fail to clarify that those top line numbers don’t take the law’s subsidies — which, as the KFF report shows, can be quite generous — into account. Some don’t even bother to separate the submitted insurance rates into Bronze, Silver, Gold, and Platinum tiers, instead combining all of those numbers to come up with a single, bloated “average” that makes Obamacare appear untenable.
While premiums will likely rise in some markets as a consequence of the health law, a growing number of states including Maryland, New York, Oregon, Montana, California, and Louisiana are reporting lower-than-expected Obamacare premiums.