Download Reid_Subsidy_Examples_11-20 for the complete CBO analysis.
The enclosed table focuses on enrollees who purchase a “reference” plan—the second lowest cost “silver” plan, as defined in the bill—because federal subsidies would be tied to the premium for it. Such a plan would have an actuarial value of 70 percent, which represents the average share of costs for covered benefits that would be paid by the plan. Although premiums under the bill would vary by geographic area to reflect differences in average spending for health care and would also vary by age, the table shows the approximate national average for that lower-cost reference plan: about $5,200 for single policies and about $14,100 for family policies in 2016. Enrollees could purchase a more expensive plan or more extensive coverage for an additional, unsubsidized premium—and CBO anticipates that many enrollees would do that, so the average premiums actually paid in the exchanges would be higher (although average cost-sharing amounts could be lower than those shown in the table). The figures are presented for 2016 in order to illustrate the likely situation after the proposed changes in insurance markets were fully implemented. A downside of that approach is that the figures are harder to compare with those observed in 2009.
Under the bill, the maximum share of income that enrollees would have to pay for the reference plan would vary depending on their income relative to the federal poverty level (FPL). For enrollees with income between 133 percent and 300 percent of the FPL, that maximum share of income would vary linearly from about 4 percent of income to 9.8 percent of income in 2014. For enrollees with income between 300 percent and 400 percent of the FPL, that maximum share of income would equal 9.8 percent. After 2014, those income-based caps would all be indexed so that the share of the premiums that enrollees (in each income band) paid would be maintained over time. As a result, the income-based caps would gradually become higher over time; for example, they are estimated to range from about 2.1 percent to about 10.2 percent in 2016. Enrollees with income below 200 percent of the FPL would also be given cost-sharing subsidies to raise the actuarial value of their coverage to specified levels: 90 percent for those with income below 150 percent of the FPL and 80 percent for those with income between 150 percent and 200 percent of the FPL