Health and Science

Higher-income Obamacare customers paying more than if they had job health care

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Affordability is in the eye of the Obamacare beholder.

A new Commonwealth Fund survey shows that Obamacare customers are much less likely than people with health insurance through an employer to view their coverage as affordable. And just under half of those customers said it was easy to find a plan they could afford, according to the survey.

The survey also found that while many lower-income Obamacare customers actually have insurance costs that are comparable to those in employer-based plans, higher-income customers "are more likely to pay more for their premiums and have a high deductible" than those in job-based coverage.

Higher-income Obamacare customers also are significantly more likely than lower-income enrollees to say that their plan premiums have increased over time.

"The findings present cautionary notes for policymakers," said a Commonwealth Fund report on the survey, released Thursday. "Adjustments to the marketplaces will likely be needed to ensure that consumers afford both the insurance and the health care they need."

Dr. David Blumenthal, president of the Commonwealth Fund, said the survey "shows that we will need to continue to monitor the affordability of the marketplaces, especially as health-care costs continue to rise and incomes remain flat."

The survey comes as insurers are releasing their proposed prices for 2017 Obamacare plans, which are on track to have higher percentage increases than in previous years.

Commonwealth's findings reflect the financial position of many Obamacare enrollees, as well as the impact of financial aid that many, but not all, of those customers receive.

Almost 85 percent of the 11.1 million people enrolled in Obamacare plans sold on government-run exchanges such as receive federal subsidies that lower the cost of their monthly plan premiums. Those tax credits, available to people with low and moderate incomes, can shield them from some or all of the effects of annual premium price hikes.

But exchange customers who earn more than 400 percent of the poverty level aren't eligible for federal financial assistance with their premiums. And people of any income level are not eligible for such aid if they buy individual health plans outside of the government marketplaces.

Another 57 percent or so of exchange customers get subsidies that lower how much they personally have to pay out of pocket for health services or medications. Those subsidies are available to such customers whose household incomes are below 250 percent of the poverty level, or $50,225 for a family of three.

The effect of the Obamacare subsidies mirrors, to a certain extent, the position of people who get health coverage through an employer-based insurance plan. Employers tend to pay the majority of the premium costs for employees, and the health coverage that workers and their families get is tax-exempt.

For many Obamacare customers with low and moderate incomes, the federal subsidies they get put them on the same footing financially with people who have job-based coverage.

The Commonwealth Fund survey found that 66 percent of Obamacare exchange customers with incomes of below $30,000 said they paid either no premiums for their coverage or less than $125 per month. That compares to 60 percent of such people in employer plans.

But the picture is different for Obamacare customers with incomes higher than $30,000. Among them, 58 percent told Commonwealth researchers that they paid more than $125 in monthly premiums, compared to 34 percent with employer-sponsored insurance.

Overall, 49 percent of Obamacare customers viewed their health plans as being affordable. That compares to 75 percent of people with employer-based insurance. Commonwealth's report noted that the difference in view is at least partly due to the fact that Obamacare customers tend to have lower incomes than people in employer plans, meaning a bigger share of their incomes are devoted to health coverage.

But Commonwealth also noted that higher-income Obamacare consumers are spending more on coverage, as a share of their income, than people who have job-based coverage.

When it comes to out-of-pocket health costs, there is also a big gap between Obamacare customers of different income groups, the survey found. That spread results from the fact that people who earn above 250 percent of the poverty level do not get any financial aid with their deductibles, copayments or coinsurance.

Commonwealth's survey found that 68 percent of customers who earn above that threshold have plan deductibles of $1,000 or more. But just 30 percent of customers who fell below the 250 percent cutoff have deductibles that top $1,000.

The report said that "cost-sharing reductions [in Obamacare plans] have made deductibles similar to those incurred in employer plans."

"The share of lower-income adults with high deductibles is similar in marketplace plans and in employer plans," the report said. "At higher incomes, however, marketplace enrollees were significantly more likely than employer plan enrollees to have a high-deductible plan."

In other survey findings, about 40 percent of respondents said they had selected a so-called narrow network plan that has fewer covered doctors and hospitals than other plans. Those plans tend to have lower costs for customers than broader network plans.

Nearly 80 percent of Obamacare customers said they were either very or somewhat satisfied with the doctors in their plans' networks, and 64 percent said their plans included some or all of the doctors they wanted.