The cost for some health care plan premiums: $0

But these medical plans under the health care law come with a catch: Hefty out-of-pocket expenses.

NEW YORK TIMES NEWS SERVICENovember 4, 2013 

Millions of people could qualify for federal subsidies that will pay the entire monthly cost of some health care plans being offered in the online marketplaces set up under President Barack Obama’s health care law, a surprising figure that has not gotten much attention.

Three independent estimates by Wall Street analysts and a consulting firm say up to 7 million people could qualify for the plans, but federal officials and insurers are reluctant to push them too hard because they are concerned about encouraging people to sign up for something that might ultimately not fit their needs.

The bulk of these plans are so-called bronze policies, the least expensive available. They require people to pay the most in out-of-pocket costs, for doctor visits and other benefits like hospital stays.

Supporters of the Affordable Care Act say that the availability of free-premium plans — as well as inexpensive policies that cover more — shows that it is achieving its goal of making health insurance widely available. A large number of those who qualify have incomes that fall just above the threshold for Medicaid, the government program for the poor, according to analysis by the consulting firm McKinsey and Co.

The latest analysis was conducted by McKinsey’s Center for U.S. Health System Reform, whose independent research has been cited by the federal government and others.

“The whole point of the law was not only to cover the uninsured, but so people didn’t have to make choices between food or drugs, or going to the doctor or dentist,” said Karen Davis, a health policy expert at the Johns Hopkins Bloomberg School of Public Health. “It’s what it is designed to do.”

Many insurers tried to price their least expensive plans so they would become free or nearly free with the addition of subsidies that are set based on a person’s income and the cost of a midlevel, or silver, plan.

The analysis found that from 5 million to 6 million people who are uninsured will qualify for subsidies that will be greater than the cost of the cheapest bronze or silver plan. Another 1 million with individual insurance could also be eligible, according to McKinsey. None of the people in the analysis qualify for Medicaid.

The availability of zero-premium plans may make the deal especially enticing to the healthy young people the marketplace needs to succeed, said Mark Pauly, a professor of health care management at the University of Pennsylvania’s Wharton School.

“This is such a good deal that you’d have to believe you were immortal not to really pick it up,” he said.

Although they vary in their design, bronze plans generally cover about 60 percent of a person’s medical costs. All plans, including bronze, must cover standard benefits like prescription drugs, maternity care and mental health treatment.

The availability of the zero-premium plans varies across the country. McKinsey found that about 40 percent of the uninsured in Missouri will be able to select a no-cost bronze plan, for example, compared with 2 percent of the uninsured in New Jersey.

For many people, paying slightly more for a silver plan may be a much better option, experts said. Ninety percent of those who will have the option of purchasing the no-cost plans make less than 250 percent of the federal poverty level, which is $28,725 for an individual, and $58,875 for a family of four. People earning below those thresholds are eligible for the most generous assistance, but only if they choose a silver plan.

About 1 million of those who will qualify for free coverage will be able to buy a silver plan for no monthly cost.

McKinsey, which is releasing a report about the new insurance marketplaces, estimates that the cost of silver plans for the people who qualify for a zero-premium bronze plan will range from $40-$50 per month.

“They may be getting zero premiums, but they’re also leaving a lot of money on the table if they don’t enroll in a silver-level plan,” said Sabrina Corlette, a professor at Georgetown University’s Health Policy Institute.

All plans, including bronze policies, limit annual out-of-pocket costs to $6,350 for individuals and $12,700 for families. But insurers and advocates said out-of-pocket costs — even those under that limit — can be daunting to people with low incomes.

For Mark and Elisabeth Horst, both artists in Albuquerque, N.M., the risks of signing up for a bronze plan were outweighed by the prospect of getting it for free. The Horsts, who make $24,000 a year between them, qualified for $612 in monthly subsidies, but the cost of a bronze plan was $581 per month. “We’re in good health,” Horst said.

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