Who are the Uninsured Eligible for Premium Subsidies in the Health Insurance Exchanges?

Almost 40 percent of uninsured people eligible to receive subsidies through state-based health insurance exchanges have chronic conditions or report "fair" or "poor" health according to a new report funded by the Robert Wood Johnson Foundation and authored by Peter Cunningham, Ph.D., senior fellow and director of Quantitative Research, Center for Studying Health System Change (HSC). In contrast, about one-third of those uninsured and eligible for subsidies report no recent problems with their health, accessing care or paying medical bills. Experts caution that enrolling this healthy one-third will be challenging, but will be essential to ensuring that exchanges avoid adverse selection—or enrollment only by sicker-than-average individuals. Otherwise, health insurance costs in the exchanges could be higher than expected.

This healthy one-third is not only collectively younger than the less-healthy uninsured, they also tend to spend little on medical care—an average of $156 out-of-pocket annually. In addition they tend to have higher incomes, meaning they’ll receive smaller subsidies to purchase insurance. The result is that it may be financially advantageous for some of them to opt to pay the individual mandate penalty, rather than enroll in an exchange. Study author Cunningham notes, however, that this relatively young and healthy uninsured group may not feel as invincible as is commonly assumed, and given affordable premiums, may enroll in exchanges to avoid potential future catastrophic health care costs.