2.2 million health insurance enrollees made this mistake – and they may do it again!

Posted August 31st, 2015 by Rob Anderson

More than 85% of Obamacare enrollees qualified for the Advanced Premium Tax Credit in 2015. This is the "subsidy" that Americans receive to help pay their monthly health insurance bill. In order to qualify an individual must make anywhere from $11,670 to $46,680 for a single person. The "subsidy" is crucial to lowering premium costs to make them affordable for Americans. In 2014 the average premium for those who qualified was just $82 per month.

But, there's more available to Americans than just premium tax credits. Cost-sharing reductions for Americans who qualify help reduce the out-of-pocket costs that are in addition to premium costs. For example, consumers that qualify could see the costs of their doctor co-pays, coinsurance, or even deductibles drop drastically. By many estimates, some 2.2 million qualifying Americans are leaving government money tied to cost-sharing on the table, in part because many are too focused on plan price. And, this is the critical mistake millions of enrollees are making.

In order to qualify for cost-sharing government money Americans must purchase a silver-tiered plan. Silver plans cover 70% of medical service costs with the member responsible for the remaining 30%, up to their maximum out of pocket deductible. Yet, bronze-tiered plans are cheaper on a monthly premium basis, but with a higher out-of-pocket responsibility of 40%. Without getting too technical, some Americans are bypassing the slightly more expensive silver plans in favor of bronze plans, and in the process foregoing any possible cost-sharing reductions should they visit their doctor or need care. It is calculated that a person who buys a silver plan as opposed to a bronze plan could save up to $1,750 by being eligible for a plan with a lower deductible and improved out-of-pocket coverage.

Worse yet, the number of consumers who made this mistake (which in 2015 was more than a quarter of eligible enrollees) could actually grow in future years. The Congressional Budget Office has suggested in its projections that some 3 million enrollees could bypass cost-sharing subsidies that they would otherwise be eligible for. This is another reason to always consult your professional agent at A & B Insurance.

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