Study says Californians missing out on health care subsidies

A new study estimates that hundreds of thousands of Californians who buy individual health insurance plans are missing out on opportunities for subsidies.

Researchers from Harvard Medical School and the Mongan Institute Health Policy Center at Massachusetts General Hospital estimate 31 percent of those eligible for one or more types of subsidies are either enrolling in plans outside of Covered California or choosing plans that are ineligible for subsidies.

The study, published in Health Affairs, also found lower-income enrollees who chose plans that weren’t eligible for subsidies were two to three times more likely to report difficulties paying for health care.

Covered California says some 1.4 million people have used it to sign up for policies.

Under the Affordable Care Act, Californians with a household income between 138 percent and 400 percent of the federal poverty level are eligible for premium subsidies on plans bought through Covered California. Enrollees with a household income between 138 percent and 250 percent of the poverty level are also eligible for cost-sharing subsidies,  but only if they choose plans in the Silver tier.

The system is complex, says study lead author Vicki Fung, so some consumers "might not have been aware" that they needed to purchase coverage through Covered California or choose a Silver plan to qualify for subsidies.

"For those below 200 percent of [the federal poverty level], if they forfeited both the cost-sharing and premium subsidies they're likely to be leaving a good amount of money on the table," says Fung, who's a professor at Harvard Medical School and an investigator at the Mongan Institute.

The study estimates that 14 percent of those eligible for cost-sharing and premium subsidies forfeited both subsidies by purchasing plans outside Covered California.

Fung says it’s possible some individuals are choosing to forgo the cost-sharing subsidies of a Silver plan for the lower monthly premiums of a Bronze plan.

Covered California believes the "vast majority" of consumers who have chosen Bronze plans were making "informed choices," says agency spokesman James Scullary.

"Every one of our enrollment channels helps consumers understand the payoffs between a substantially lower monthly premium and having the benefit of cost-sharing reduction," he says.

It's important to remember that "this really is a new era in health care," and "for many people it is their first introduction to health insurance," says Scullary. "We need to continue to make sure consumers understand their options and the benefits that are available through Covered California, including financial help."

The exchange examines its website "and our enrollment process every year to try and make it as easy and simple for consumers as possible," he says.

Understanding "how to help make these very complex decisions" would be important in any insurance market, says Fung, "whether or not it’s under the current structure of the [Affordable Care Act] or under a different market structure in the next few years."