Double Edged Sword: Health Insurance Exchange May Cover More People, But Cost Others More Money

December 13, 2011

By Monette Goodrich, Vice President of Communications & Public Affairs

While about 321,000 currently uninsured Connecticut residents below age 65 could qualify for health insurance coverage under the federal Affordable Care Act, it may cost more than some can afford, according to a Mercer presentation at last week’s Health Insurance Exchange Board meeting.  Mercer was hired by the Office of Policy & Management to complete 11 “tasks” or research projects to help the Exchange Board begin formulating policies.  Many of these tasks are required components of federal health insurance exchange grant initiatives.

Representatives from Mercer estimated that 156,000 of the uninsured under age 65 with an annual income of 139 percent of the federal poverty level would qualify for Medicaid under the new federal law. The state will receive 100 percent of coverage costs from the federal government between 2014 and 2016 and a decrease to 90 percent by 2020.

Part of the 156,000 includes folks who are currently eligible for Medicaid (today in 2011) but have not enrolled.  If these residents enroll after 2014, the feds will contribute the usual 50 percent match.

To offset these costs, the state may want to transition the non-elderly adult Medicaid population to an Exchange plan or state optional basic health plan (the Health Exchange Board will determine if Connecticut will offer a basic health plan) as early as 2014 to take advantage of premium and cost sharing subsidies, according to Mercer.  According to slide 78, about 16,500 HUSKY A parents with an income between 134 percent and 185 percent of FPL could be transitioned to the Exchange and would face out-of-pocket costs they do not currently pay today.

With a continued poor economic outlook over the next 3-5 years, many of those who could be transitioned into the Exchange may be unable to pay their share of health coverage and could forgo health insurance coverage altogether.

For more in-depth coverage of the Board’s meeting, please see the Connecticut Mirror’s Dec. 5th news story on this topic.

Mercer will continue presenting its preliminary findings on Dec. 15.


Photo by Vanessa Pike-Russell under the Creative Commons license.

2 Responses to Double Edged Sword: Health Insurance Exchange May Cover More People, But Cost Others More Money

  1. Jennifer Jaff says:

    I beg to differ. Under the Affordable Care Act, health insurance can only cost up to a certain percentage of income — I believe 8%. Above that, there will be subsidies for people for whom health insurance is unaffordable. And the minimum coverage requirement (individual mandate) only applies if insurance would be “affordable” — under a certain percentage of income. So actually, people who are transitioned into the Exchange should be able to find affordable insurance with the help of subsidies that come from the federal government.

    Thanks for this provocative post!

  2. Monette says:

    Thanks for reading and responding to my blog post, Jennifer. While federal subsidies will help make health insurance more affordable for some families, many experts and advocates are concerned the subsidies may not be enough to make coverage affordable for everyone (especially in a high cost of living state such as Connecticut). Whatever happens with the implementation of health care reform in Connecticut, I am glad advocates like you are actively engaged in an issue that will impact thousands of state residents.

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