We All Want it, but We Don't Know What it is

Toward a Standard of Affordability for Health Insurance Premiums

The 2010 Patient Protection and Affordable Care Act requires that U.S. citizens either purchase health insurance or pay a fine. It also provides subsidies to ensure that premiums are affordable for those who are less affluent. But what is affordable?

To try and define affordable, researchers convened an interdisciplinary panel of 16 distinguished experts in social policy. The experts were asked to respond to 61 designed vignettes that provided information on hypothetical households such as age, marital status, income, debt, savings, number of children and housing costs. The researchers also described two health insurance plans—one basic and one more comprehensive—and asked the experts how much each household could afford for each plan (from $0 to $1,600 per month). The experts met to discuss their scoring and the rules they devised for their ratings.

On average, experts believed 6.5 adjustments should be taken into account when setting subsidy levels, but disagreed about which particular factors should be considered. They also disagreed about the meaning of affordability—whether it was what a person could or should pay.

Affordability, they conclude is a very subjective concept and “any specific affordability threshold or subsidy structure is likely to be contentious and contested.”

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