Consumers are missing out on potential subsidies because they are unaware of the financial assistance available to them, HHS says.
An estimated 2.5 million people would qualify for subsidies on the purchase of their healthcare insurance if they bought plans from the Obamacare marketplaces rather than the open market, according to a report from the U.S. Department of Health and Human Services (HHS).
49% Don't Understand Health Plan Costs
HHS released the data in advance of the next open enrollment period.
California, Texas, Florida, North Carolina, Illinois, and Pennsylvania each have more than 100,000 individuals enrolled in off-marketplace individual market coverage even though their incomes may qualify them for marketplace tax credits, the report said.
Consumers may be eligible for subsidies if their incomes are between 100% and 400% of the federal poverty level, which for a family of four is about between $24,300 and $97,200.
"More than 9 million Americans already receive financial assistance through the Health Insurance Marketplace to help keep coverage affordable, but today's data show millions more Americans could benefit," HHS Secretary Sylvia M. Burwell said in a statement accompanying the data.
"We encourage everyone to check out their options on HealthCare.gov or their state Marketplace and see if they qualify for financial assistance. Marketplace consumers who qualify for financial assistance usually have the option to buy coverage with a premium of less than $75 per month."
In addition to making premiums less expensive, the subsidies can help protect against rate increases. If all premiums in an area go up, the large majority of marketplace consumers will not have to pay more because tax credits will increase in parallel, the HHS report explains.
Health Plans Set to Pour Money into Open Enrollment for 'Crazy System'
An HHS analysis found that in a hypothetical scenario where all 2017 rates increased by 25%, tax credits would make it possible for 73% of current marketplace consumers would still be able to purchase coverage for less than $75 per month.
About 6.9 million individuals purchase health insurance in the off-marketplace individual market. Of those, about 1.9 million either have incomes that would qualify them for Medicaid or place them in the Medicaid coverage gap or are ineligible to purchase marketplace coverage due to immigration status, while the remainder could enroll in marketplace qualified health plans (QHPs).
HHS reports that more than 70% of all QHP-eligible individuals currently insured through the individual market have incomes that could qualify them for tax credits. That figure rises to 80% if the marketplace-eligible uninsured are included.
Those consumers are missing out on potential subsidies because they are unaware of the financial assistance available to them, HHS says. The agency points to a Commonwealth Fund survey which found that only 52% of uninsured adults were aware that financial assistance is available through the marketplaces.