Report: Subsidized ACA Enrollees in Texas Paying Lower-Than-Average Premiums

Texans who received financial assistance to purchase health coverage through the federal insurance exchange are paying less in monthly premiums than individuals in most other states using that online marketplace, according to a new report by the U.S. Department of Health and Human Services.

Texas, like dozens of other states with Republican leadership, declined to create its own state-based insurance exchange under the Affordable Care Act, relying on a federally managed marketplace instead. 

Texans who receive tax credits to help them purchase health coverage through the federal marketplace pay $72 on average in monthly premiums for their plans — the seventh-lowest monthly premium among the 36 states using the federal marketplace.

The national average for subsidized enrollees in the federal marketplace is $82 a month, with individuals in states like New Mexico, Wyoming and New Jersey paying more than $100 a month on average.

The Affordable Care Act requires most individuals to carry health insurance by March 2014, and 733,757 Texans had signed up for a plan through the federal marketplace as of April 19. The federal government is footing part of the bill for low-income people who cannot afford to pay for all of their coverage when they apply through the marketplace.

On average, subsidized enrollees — who make up 84 percent of Texans who purchased coverage through the federal marketplace — have received $233 in monthly tax credits in Texas.

“What we’re finding is that the marketplace is working for Texans, Health and Human Services Secretary Sylvia Burwell said in a statement. “Consumers have more choices, and they’re paying less for their premiums. When there is choice and competition, everybody benefits.”

To qualify for subsidies, individuals must generally have annual incomes that range from one to four times the federal poverty level — $11,490 to $45,960 for an individual and $23,550 to $94,200 for a family of four.

Roughly three-quarters of Texans who accepted tax credits will pay $100 or less a month for their insurance plans, with a majority of subsidized enrollees in the state paying $50 or less.

Opponents of the health reform law have attributed low overall enrollment rates to the fact that low premiums often mean high deductibles. Despite the subsidies offered by the federal government, Texas' total enrollment numbers have not made a big dent in the state's sky-high rate of uninsured.

John Davidson, a health policy analyst at the conservative Texas Public Policy Foundation, has said that Texans' reluctance to purchase insurance through the marketplace in bigger numbers stems from the cost of the health plans, even subsidized ones.

He added that individuals are also apprehensive about accepting the subsidies because they might be faced with paying them back if their annual income increases.

The new report comes with some caveats. The federal data does not include income levels for the subsidized enrollees who accepted the tax credits, or the amount of the deductibles those enrollees could be left to pay. Health plans are divided into five different categories, but the plans that offer lower premiums often have the highest out-of-pocket costs.

In Texas, a majority of the individuals who enrolled in the marketplace selected mid-tier Silver plans. But almost a quarter of Texans selected Bronze plans, which have lower monthly premiums but higher out-of-pocket costs.

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.