For millions, insurance will cost less than $100/month

Kelly Kennedy | USA TODAY

This story was originally published Sept. 17, 2013.

WASHINGTON — About 6.4 million Americans eligible to buy insurance through the new health exchanges will pay $100 or less a month in premiums because of tax subsidies, according to a Department of Health and Human Services report to be released Tuesday and obtained by USA TODAY.

The report by the HHS office for planning and evaluation said the lower premiums would primarily apply to insurance customers who buy what are called "silver" plans on the exchanges that open Oct. 1.

"The health care law is making health insurance more affordable," said HHS Secretary Kathleen Sebelius. "With more than half of all uninsured Americans able to get coverage at $100 or less, the health care law is delivering the quality, affordable coverage people are looking for."

The 2010 health care law, also called the Affordable Care Act, requires Americans without health insurance from their employers, Medicare or Medicaid to buy insurance through websites called exchanges that were created for each state. The law also allowed states to expand coverage under Medicaid, the federal-state program for low-income Americans.

Subsidies are available to Americans who make less than 400% of the poverty level, or $94,200 for a family of four. The rates were based on people buying silver plans through the exchanges, or the second-lowest-cost plan through the exchanges. Researchers looked at Census data to estimate costs.

What you need to know about open enrollment USA TODAY's Hadley Malcolm explains everything you need to know about open enrollment.

Although not all of the states nor the federal exchange have announced their rates yet, researchers determined they could estimate payments without that information. As an example, the Affordable Care Act states that someone making 150% of the federal poverty level, or $17,235 a year, would pay 4% of their income — or $57 — for the second-lowest-cost plan. So, that person's subsidy would be the difference between the $57 and the cost of the silver plan in that state.

"Consequently, it is not necessary to know the actual second-lowest-cost silver premium to determine how many people will pay $100 or less per person per month for a silver plan," the report states.

In addition to the subsidized insurance, a total of half of all uninsured Americans could pay less than $100 for insurance beginning in January because of other expanded programs. About 41.3 million people don't have insurance now, according to HHS.

In the 25 states that have decided to expand Medicaid, 12.4 million uninsured Americans will be eligible to pay less than $100 a month, the report found. People in this group will pay either nothing or a small premium to participate in Medicaid.

If the rest of the states expanded Medicaid to coverage to those who earned below 138% of the poverty level, about one in four of the 41.3 million people without insurance would qualify for Medicaid, tax subsidies to help pay for insurance or the Children's Health Insurance Program, researchers found.

On Monday, Pennsylvania, announced it would expand Medicaid.

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