NORC Study for Commonwealth Fund Reveals Value of Major Cost-Saving Option of Affordable Care
An NORC research team led by Senior Fellow Jon Gabel carried out a major study of a little known but very significant aspect of the Affordable Care Act called Cost-Sharing Reduction Plans (CSRs). The work was supported by The Commonwealth Fund, a private, independent foundation whose mission is to promote a high performance health care system.
The study reveals the ways in which the CSRs, which are available only through silver-level plans purchased through the Affordable Care Act marketplaces, can significantly reduce the out-of-pocket costs of health care for low- and moderate-income households.
“One common misunderstanding of the Affordable Care Act is the amount of cost-sharing—deductibles, copayments, and out-of-pocket limits—that enrollees face,” said Gabel. “Many low-income Americans are unaware that they can enroll in a silver plan on the exchange that automatically includes a Cost-Sharing Reduction Plan that dramatically reduces the out-of-pocket expense.”
Gabel notes one conclusion of the study is that persons with CSRs report higher satisfaction with their plans and less trouble gaining access to care and paying medical bills than enrollees without cost-sharing benefits.
The Commonwealth Fund announcement of the study follows.
From The Commonwealth Fund:
Sharply Lower Costs Found for Enrollees in ACA's Cost-Sharing Reduction Health Plans
Americans eligible for and enrolled in marketplace health plans that include cost-sharing reductions (CSRs) pay much less out of pocket for their insurance coverage and their care than those enrolled in similar marketplace plans without these reductions, according to a new Commonwealth Fund study by Jon Gabel and colleagues at NORC at the University of Chicago.
A less well-known feature of the Affordable Care Act, cost-sharing reductions are automatically made available to low- and moderate-income households—those earning between 100 percent and 250 percent of the federal poverty level—that choose silver-level marketplace plans, most of which cover only about 70 percent of health care costs. The substantially lower deductibles, copayments, coinsurance, and out-of-pocket limits made possible by CSRs can make silver plans for eligible consumers in the lowest income range actuarially equivalent to platinum plans.
In analyzing CSR-eligible plans sold in individual marketplaces in all 50 states and Washington, D.C., the researchers found that annual deductibles range from $246 for silver plans with CSRs and a platinum-level actuarial level to as much as $3,063 for silver plans without CSRs.
In 2016, about 7 million people, or 57 percent of total marketplace enrollment, were in plans with CSRs. Still, many people eligible for them are not enrolled, the authors say.
“Many low-income Americans are unaware that they can enroll in a silver plan on the exchange that automatically includes a Cost-Sharing Reduction Plan that dramatically reduces the out-of-pocket expense.”
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