A new analysis of the Patient Protection and Affordable Care Act shows the law of supply and demand at work. Enrollment through exchanges drops significantly as income rises, according to Avalere Health, an advisory company in Washington, D.C.
"People receiving more-generous subsidies are expected to enroll in the exchanges at higher rates," said Elizabeth Carpenter, director at Avalere. "However, participation levels decline as incomes increase, even among individuals who would be eligible for both premium subsidies and cost-sharing reductions."
The analysis reviewed Department of Health and Human Services reported income distribution for the 2015 exchange population in the 37 states using HealthCare.gov.
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These exchanges had enrolled 76 percent of eligible individuals with incomes between 100 and 150 percent of the federal poverty level by the end of the latest open-enrollment period. However, participation rates decline sharply as incomes increase and subsidies decrease.
Percent of poverty rate Percent enrollment
100 to 150 76
151 to 200 41
200 to 250 40
251 to 300 20
351 to 400 16
400+ 2
Approximately 83 percent of 2015 exchange enrollees earn less than $29,425 a year for an individual, according to March HHS data. These consumers have the greatest incentive to enroll in coverage, because they benefit from higher subsidies and more-generous coverage. As subsidies decline, the individual mandate penalties become more important to encourage uninsured consumers to enroll.
What does this mean for the future of PPACA?
"Exchanges will need to attract higher-income consumers to ensure enrollment continues to grow over time," said Caroline Pearson, senior vice president at Avalere. "So far, tax credits do not appear to be enough to entice participation, so greater emphasis on individual mandate penalties may be needed to help increase enrollment among low- and middle-income individuals."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
