Most Families Can Afford Coverage Under Health Law, but Poor Still Lag

Federal assistance available under the health reform law will make private insurance affordable to 90 percent of Americans living above the poverty line even though poorer people may end up struggling more to pay out-of-pocket costs, a new report by the Commonwealth Fund found.

“Basically, the Affordable Care Act is affordable for virtually everyone,” said Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology and co-author of the report. “The only sort of black mark is that very sick, low-income people are not as protected as they should be.”

The report uses consumer spending data to analyze family budgets across income levels, and compares them to the costs of buying coverage through subsidized “exchanges,” virtual insurance marketplaces, and out-of-pocket health care spending.

The report found that the overwhelming majority of families can afford to pay for premiums and out-of-pocket costs once they pay for child care, food, housing, taxes, and transportation.

Even so, some families across all income levels would continue to struggle to afford coverage due to high out-of-pocket costs. According to the report, about 17 percent of typical four-member families with incomes up to $44,700, and about 25 percent of families earning between $44,700 and $67,050, would struggle with health care costs.

The data looks at costs in 2014, the first year the law will be fully implemented and the opening date for state-based health insurance exchanges. The law provides a federal subsidy for the lowest-income people to use to buy insurance.

Those with incomes from 133 percent to 399 percent of the poverty level are eligible for income-based tax credits. Certain people with low incomes are also eligible for subsidies to offset out-of-pocket costs.

Americans who make less than 133 percent of the poverty level are eligible for free public insurance through Medicaid.

The broader question over how to make coverage more affordable dogged lawmakers and health policy analysts who worked on the reform package, and workable solutions still seem at bay, Gruber, who advised the White House during that process, said.

“We should have had more cost-sharing subsidies,” he added. “Overall, the story’s a good one.”

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