Relative Affordability of Health Insurance Premiums Under CHIP Expansion Programs and the ACA

The 2010 Patient Protection and Affordable Care Act (ACA) requires individuals to have health insurance or pay a fine. Individuals will be able to purchase insurance through health insurance exchanges and receive subsidies to assure affordability, capping coverage costs at 9.5 percent of family income.

The investigators compared the cost of insuring a family in three states—Illinois, Pennsylvania and Washington—through a combination of Children’s Health Insurance Programs or CHIP (for children) and employer-sponsored insurance (for parents) to that of a family receiving coverage through an exchange.

The premiums as a percentage of family income varied substantially across states. For example, families earning just over 300 percent federal poverty level (FPL) would pay 9 percent of income to insure three children in Pennsylvania and 2.2 percent in Illinois. They would be ineligible for CHIP in Washington.

For some families, coverage through CHIP and employer-sponsored coverage would be more affordable than through an exchange. At 150–200 percent FPL, affordability ranged from 1.2 percent to 5.5 percent of family income, which is below the range of costs through an exchange (4% to 6.3%). At 200–250 percent FPL, premiums range from 3 percent to 6.4 percent, compared to 6.3 percent to 8.05 percent for exchange coverage.