Did You Know That 6 to 7 Million Americans Will Qualify for “Free” Health Insurance In the Exchanges? “Affordability May Not Be a Roadblock” to “Signing Up 7 Million” in 2014 –Credit Suisse

If you know someone who is uninsured, or buys her own insurance in the individual market– and lives in Texas, North Carolina, Missouri, Oklahoma, Louisiana, Mississippi, or Alabamachances are greater than 1 in 3 that under Obamacare she will qualify for health insurance that will cost her nothing. That’s right—her government tax credit will cover the entire premium.

It gets better. After shopping the state Exchanges during the first two weeks of October, McKinsey & Co, a leading global management consulting firm, discovered that people who are currently uninsured (or who buy their own insurance) in Florida, Wisconsin, Georgia, South Carolina, Tennessee, Virginia, Maine, Indiana, Kansas, Nebraska, Utah, Idaho, Montana or Alaska– stand a 1 in 4 chance of qualifying for a $0 policy.

How can that be? McKinsey explains that their income will makes them eligible for a government subsidy that will be larger than the policy’s premium.  Americans earning somewhere between $11,490 and 400% of the FPL ($48, 950 for an individual, $62,040 for a couple, $94,200 for a family) will receive subsidies. The lower your income, the larger it will be, and the more likely it is that your premium will be Zero .

This table from Credit Suisse reveals that in many states, uninsured Americans earning less than 175%  of the Federal Poverty Level (roughly $20,100 for an individual; $21,750 for a couple;  $34,170 for a family of three;  $41, 200 for a family of four) will be able to find zero-premium plans. Even if you earn somewhat more, it’s well worth the time it will take to check with your state marketplace.  You may discover that while coverage isn’t free, your subsidy will bring the cost down to as little as $20 a month.

Credit Suisse analyst Ralph Giacobbe agrees that roughly “6.5 million Americans … will be eligible for a $0 premium plan.” As a result, he believes that “affordability may not be a roadblock” to achieving the Congressional Budget Office projection that 7 million people will buy insurance in the exchanges in 2014

“Simply put, we don’t see any logical reason why anyone in this population wouldn’t take free healthcare coverage vs. remaining uninsured.”

The only question is this: How many people will hear about the free plans? Can we count on the media to inform the public? (Hat tip to the New York Times for publishing a front-page story about the McKinsey research.) Now, I would love to see the story on FOX – and in Forbes.

You can help spread the word. Do you know someone who is single, earns somewhere between $11, 490 and roughly $20,100 (175% of the FPL) and does not  have employer-sponsored insurance?  A graduate student?  Your cousin’s son?

Do you know   a family of three with income under $34,170 (175% of the FPL)  Perhaps the stay-at-home Mom down the street who just had a baby?

Good News for 20-Somethings and 30-Somethings

McKinsey reports that about half of those who will be able to purchase zero-premium insurance will be under 39 years old.

I originally published this story on  the Health Insurance Resource Center Blog. Click  there to  read the rest of the post—and find out more about the cap on the  co-pays and deductibles that someone with a $0 premium plan would pay.  

You can comment on the Health Insurance Resource Center Blog, or  you come back here to respond.


19 thoughts on “Did You Know That 6 to 7 Million Americans Will Qualify for “Free” Health Insurance In the Exchanges? “Affordability May Not Be a Roadblock” to “Signing Up 7 Million” in 2014 –Credit Suisse

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  2. Maggie:

    It is not free. It is just paid for by someone else.

    That is welfare. That is redistribution of wealth. That is socialism. It works great until the other person runs out of money.

    Maggie, there is no free lunch! What else do you want me to pay, for other people.


    • Charles–

      Yes, this is redistribution of wealth and services– from those who can afford to pay to those who cannot– and need help.

      Tax rates for those earning over $200,000 are at historic lows. Since 1980 we have been redistributing wealth in one direction–upward–through lower taxes for the rich and lower wages for the
      middle-class and poor.

      Now we’re going to redistribute wealth in the other direction.
      We’ve reached a turning point in history: Obama in the White House, people like Elizabeth Warren and Corey Booker in the Senate.

      Voting demographics are changing. More and more minorities are voting–and they are electing liberal Democrats.

      IN the future people of all races will be sharing power. Many more women will be elected Congress. Perhaps you were surprised when Obama was re-elected. Just watch what happens next..

    • Charles, do the math. When these people go to the ER, you pay already. You don’t pay for the cheaper, preventive care, but for the more expensive alternate, after-the-fact care.

      If you do the math, you will find yourself saving money as well.

      • Srihari —

        Thanks very much for your comment. And welcome to HealthBeat

        Yes, the math makes it obvious: it is better for All of Us if everyone has access to free preventive care, as well as
        affordable treatments

  3. In Mississippi, the state refused the Medicaid expansion, so, that no one who needs insurance or is poor can take part in the ACA. Most of the southern states are in the same boat.

    • Pris-

      The fact that Mississippi rejected Medicaid expansion does not mean that low-income people cannot participated in the Exchanges.


      A low- income individual who earns somewhere between $11.490 and $45,960 can participate in the Exchange– and get a subsidy that will in many cases will cover a large part–or even all–of his premium, See http://www.null.com/blog/2013/07/23/will-you-receive-an-obamacare-subsidy/

      He or she may also be eligible for a subsidy that will cover a large share of any co-pays or deductible.

  4. I’m worried that the 9.5% affordability rule only applies to self-only coverage. I know people who are being really hurt by that. Or–rather they are not helped, instead they are screwed as they have always been.

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  6. Martha–

    Thanks for your comment.

    I agree–and I think this is something that will be fixed.

    Many reformers in D.C. agree with you.

    But right now, they can’t open the legislation up for changes– or conservatives will say, “Now that it’s open let’s make some other changes. . . . ”

    And the whole process would turn into a stalemate.

    The change you want wouldn’t happen, and Congress would spend more months debating the Affordable Care ACt (rather than focusing on unemployment, the economy , the many things that need to happen.

    I realize that this is frustrating. But we are going to have to wait until the Tea Party legislators are voted out of office, and Democrats (along with some traditional, moderate
    Republicans) have control of both Houses of Congress. Then legislators will be able to begin making positive,
    meaningful changes to the bill.

  7. Hi Maggie, I agree, the only way to change this unfortunate aspect is for Congress to act–it is in the language of the law. And yes, I agree, it is not a good idea to bring it up before this Congress. I do not share your optimism, however, for future Congresses. I don’t think the Democrats understand this law and its implications any better than the Repubs. This is evidenced by the move to require the insurance companies to reinstate the “mini-meds” that they had begun to scrub out. In my view this is not a good idea in the long run, and I think it will ultimately prove counterproductive to the law’s aim to change the behavior of the markets.

  8. Maggie – Thanks for the article. Do these numbers remain the same inspite of the healthcare.gov website debacle and the inability of people to enroll? Most of the complaints are from younger professionals with individual coverage who have received the cancellations and have to deal with much higher premiums ( as they dont have to qualify for subsidies). What is the percentage of these people?

    • Lyer —

      Only 5% of people purchase their own insurance. (These are the policies that are being cancelled because they don’t meet Obamacare’s rules– either the insurance policies are filled with holes, or they leave people exposed to huge out-of-pocket expenses.

      Of those 5% of Americans who buy their own insurance, many will qualify for generous subsidies. Their premiums may will be lower than they are today–or just a little higher —and they will be getting much better insurance. Some are delighted–in the past they couldn’t get anything better than junk insurance because they suffered from a pre-existing condition.

      There are people who are unhappy. As you say they tend to be people who earn more than median income for their age and
      often they are young people who think they don’t need insurance. But when you count the number of people who will have their insurance cancelled and who will wind up paying more for coverage you are looking at less than 1% of the population.

      These people are complaining loudly–but remember they don’t qualify for subsidies because they earn more than the average 20-something or 30-something. And by joining the insurance pool in the Exchanges they are helping to fund healthcare for all of us. No one knows who will be in an accident or become sick. By sharing the risk, we help each other.

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  10. I just heard you being interviewed on the On The Media podcast and would like to mention an anecdote regarding healthcare coverage in the media:
    (This turned out not to matter anyway – because of the looming website disaster – but still…) On the eve of the healthcare.gov rollout, our local daily devoted a page and a half to the fact that people were still uninformed about Obamacare. There was no attempt in the story to correct that.

    • Thanks Bob–

      That is exactly what I am am getting at.

      If the media knows that people are still uninformed about Obamcare, why wouldn’t producers and editors ask reporters to step forward and
      explain the law to the public?

      Instead they have continued to publish stories filled with misinformation.

      I’m now writing a post about a CBS piece that reached millions nationwide–It was produced by CBS Washington Bureau, and it was wrong, from top to bottom.

      (This post will appear here on HealthBeat at the end of the week–or on the week-end.