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More than two million Americans have lost out on federal subsidies because they didn’t use a licensed insurance agent.
A recent analysis by Avalere Health finds that more than two million people enrolled in plans through health insurance exchanges are missing out on subsidies that could significantly reduce their out-of-pocket costs.
Avalere’s analysis determined that 8.1 million people had incomes that qualified them for cost-sharing reductions, but only 5.9 million received them.
- Those at a certain income level (100 to 250% of the federal poverty level) qualify for cost-sharing reductions, but only if they purchase a silver-level plan.
- Cost-sharing reductions are separate from the premium tax credits (for those with incomes up to 400% of the poverty level) that are applicable to any level of plan. (If this sounds like a foreign language to you, not to worry, we’ll help.)
Reductions are automatically applied to qualified people enrolling in silver-level plans. If you didn’t receive those reductions, you probably enrolled in the less expensive bronze-level plan. That choice to forgo the reductions for a cheaper plan may not actually save you money.
“Surveys show that people shop for plans based on premiums,” Carpenter is quoted by Kaiser Health News. “But if somebody forgoes cost-sharing reductions in order to pay a lower monthly premium and then has an unexpected accident or illness, their out-of-pocket exposure is likely to be higher.”
Enrollees with a silver plan are responsible for paying 30% of their out-of-pocket medical costs, but the cost-sharing reduction can lower that to as little as 6%, depending on income, and lower the individual’s maximum out-of-pocket spending limit.
Using a licensed insurance agent who is looking out for your best interest is not only a good idea, but one that costs you nothing and could save you money.
Bill Askins | Advisor Since 1993