Bernadette Fernandez
Specialist in Health Care Financing
Thomas Gabe
Specialist in Social Policy
On March 23, 2010, the President signed into law health reform legislation (the Patient Protection and Affordable Care Act, PPACA, P.L. 111-148, as amended by the reconciliation act, P.L. 111- 152) that will, among other things, provide “premium assistance credits” beginning in 2014 to help certain individuals pay for health insurance. This report describes the premium credits as reflected in current law through this legislation (hereafter referred to simply as PPACA).
Under PPACA, state-established “American Health Benefit Exchanges” will have to be established in every state by January 1, 2014. Exchanges will not be insurers, but will provide qualified individuals and small businesses with access to insurers’ qualified health plans in a comparable way.
Only for purchase of coverage within an exchange, advanceable, refundable premium assistance credits will be available to limit the amount of money some individuals would pay for premiums. Under PPACA, for example, a family of three just above 133% of the federal poverty line (FPL)—that is, currently with annual income of $24,352—would be required to pay 3% of its income toward premiums ($824 annually, if the proposed premium subsidies were currently in effect). A family of three just under 400% FPL ($73,240), where the premium subsidies end, would be required to pay no more than 9.5% of its income in premiums ($6,958 annually, if the proposed premium subsidies were currently in effect).
Although the premium credits will not be available until 2014 under PPACA, the illustrations provided in this report are based on current FPLs, to reflect how the premiums families would pay compare to their current income levels.
Relative affordability of health insurance premiums individuals and families might face within health insurance exchanges will likely vary from exchange to exchange based on a host of factors, including enrollees’ age, the health of the people actually enrolled in the plan, the varying prices paid by plans for medical goods and services, the breadth of the provider network, the provisions regarding how out-of-network care is paid for (or not), and the use of tools by the plan to reduce health care utilization (e.g., prior authorization for certain tests). Examples shown in this report depict a range by which premiums might reasonably be expected to vary based on enrollees’ age, and variation in medical costs across geographic areas, for purposes of illustration only. Actual premiums will likely vary among health insurance exchanges based on a wide range of factors other than those depicted in this report.
Date of Report: September 21, 2010
Number of Pages: 27
Order Number: R41137
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Specialist in Health Care Financing
Thomas Gabe
Specialist in Social Policy
On March 23, 2010, the President signed into law health reform legislation (the Patient Protection and Affordable Care Act, PPACA, P.L. 111-148, as amended by the reconciliation act, P.L. 111- 152) that will, among other things, provide “premium assistance credits” beginning in 2014 to help certain individuals pay for health insurance. This report describes the premium credits as reflected in current law through this legislation (hereafter referred to simply as PPACA).
Under PPACA, state-established “American Health Benefit Exchanges” will have to be established in every state by January 1, 2014. Exchanges will not be insurers, but will provide qualified individuals and small businesses with access to insurers’ qualified health plans in a comparable way.
Only for purchase of coverage within an exchange, advanceable, refundable premium assistance credits will be available to limit the amount of money some individuals would pay for premiums. Under PPACA, for example, a family of three just above 133% of the federal poverty line (FPL)—that is, currently with annual income of $24,352—would be required to pay 3% of its income toward premiums ($824 annually, if the proposed premium subsidies were currently in effect). A family of three just under 400% FPL ($73,240), where the premium subsidies end, would be required to pay no more than 9.5% of its income in premiums ($6,958 annually, if the proposed premium subsidies were currently in effect).
Although the premium credits will not be available until 2014 under PPACA, the illustrations provided in this report are based on current FPLs, to reflect how the premiums families would pay compare to their current income levels.
Relative affordability of health insurance premiums individuals and families might face within health insurance exchanges will likely vary from exchange to exchange based on a host of factors, including enrollees’ age, the health of the people actually enrolled in the plan, the varying prices paid by plans for medical goods and services, the breadth of the provider network, the provisions regarding how out-of-network care is paid for (or not), and the use of tools by the plan to reduce health care utilization (e.g., prior authorization for certain tests). Examples shown in this report depict a range by which premiums might reasonably be expected to vary based on enrollees’ age, and variation in medical costs across geographic areas, for purposes of illustration only. Actual premiums will likely vary among health insurance exchanges based on a wide range of factors other than those depicted in this report.
Date of Report: September 21, 2010
Number of Pages: 27
Order Number: R41137
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Posts
