Feds: Fewer than half of Obamacare applicants qualify for subsidies

In the first month of enrollment, just 106,185 people in the U.S. signed up for private insurance plans sold through the exchanges created by the federal health law, according to figures released by the U.S. Department of Health and Human Services Wednesday.

The figures are the first enrollment numbers released by the federal government and offer an early glimpse at sign-up trends in a program that has been bedeviled by technical problems.

They show that nearly 75 percent of people who picked an insurance plan to buy live in states that, like Connecticut, run their own exchanges, even though the majority of states rely on the problem-plagued federal system to run their exchanges.

The data also show that just over half of the people who have applied for health insurance through the exchanges — 51 percent — don’t qualify for financial assistance to help pay for coverage, either through Medicaid or discounted insurance premiums. The health law aims to cover millions more Americans by expanding Medicaid and providing tax credits to discount premiums on private health insurance plans. But if early application trends continue, many people will be left to pay the full price of coverage on their own.

The figures cover Oct. 1 to Nov. 2, and show that exchanges nationwide received applications representing 1,509,883 people.

Most were found to be eligible to buy private insurance, but fewer than 10 percent selected a plan to purchase.

Just over a quarter of the people whose applications were processed were found to be eligible for Medicaid or the public Children’s Health Insurance Program.

U.S. Department of Health and Human Services Secretary Kathleen Sebelius said it wasn’t discouraging that so few people had selected a plan yet, since payment isn’t due until Dec. 15. The new coverage takes effect Jan. 1 at the earliest.

She said the enrollment figures for the country are expected to grow “substantially” over the next five months. During a conference call with reporters, she noted that after Massachusetts passed a universal health care law, only a tiny fraction of the people who ultimately signed up for coverage did so in the first month of enrollment.

“This data represents only a month into a sustained, six-month enrollment and outreach effort, and we’re confident that as more people across the country learn about their options, more people will find a plan that meets their needs and their budgets, and more will enroll in coverage,” Sebelius said.

People can sign up for private insurance through the exchanges through March 31, although they must apply by Dec. 15 to have insurance by Jan. 1.

The Congressional Budget Office estimated that 7 million people would enroll in coverage through the exchanges in 2014. HHS noted in a report released Wednesday that the 1.5 million people who have applied for coverage represent 22 percent of that estimate.

But the number of people who have actually selected a plan is only 0.48 percent of the 7 million estimate.

Asked about the proportion of applicants who don’t qualify for financial assistance to buy coverage, Sebelius said many of the early applicants might be people who have had coverage before, while getting lower-income people to apply for coverage will require more outreach.

According to the federal figures, Connecticut’s exchange, Access Health CT, received 12,337 applications from Oct. 1 through Nov. 2. Because some of the applications were for family coverage, the number of people represented by those applications is 18,815.

About a third of Connecticut’s applicants — 6,490 — were deemed eligible for the state’s HUSKY program, which provides Medicaid and Children’s Health Insurance Program coverage.

The other 12,325 were found to be eligible to buy a private insurance plan through the exchange. Fifty-five percent of those would qualify for subsidized premiums, while the rest would have to pay the full cost of coverage.

The proportion of applicants deemed eligible for private insurance who qualify for subsidies varies considerably by state.

In New York, 134,897 people who have applied for coverage were found to qualify for private insurance, and of those, 34,267 — 25 percent — are eligible for subsidies, according to the federal data.

By contrast, in Maryland, 75 percent of the 3,498 applicants eligible for private insurance would get a subsidy if they buy coverage through the state’s exchange.

The subsidies are based on income and are available to people earning between 100 percent and 400 percent of the poverty level.

In Connecticut, people earning up to 400 percent of the poverty level will qualify for either Medicaid, which is free in the state, or subsidies, and only those who earn more would be deemed ineligible for discounted premiums.

But in 25 states that chose not to expand their Medicaid programs as part of the health law, some of the people ineligible for subsidies are expected to be those below the poverty line.

As written, the health law required states to expand their Medicaid programs to people earning up to 138 percent of the poverty level, meaning that people below poverty wouldn’t need subsidies to get coverage through the exchange. But the U.S. Supreme Court ruling on the law in 2012 made expanding Medicaid optional to states, and 25 opted against doing so.

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