Many Americans Forgo Health Insurance, Despite Large Subsidies

There has been much ado about the stiff penalties that come with remaining uninsured under the Affordable Care Act. Those who spent 2014 without a coverage plan are about to be slammed with either a $95 penalty or be subjected to confiscation of 1% of their income, whichever sum is higher. While Obamacare in itself is a remarkably famous piece of legislation, and nearly every American has heard of it, many speculate that the bulk of those who are still uninsured (and consequently facing penalties) are so due to simple ignorance of the mandate portion of the law.

A study by Avalere Health reveals that there is a major demographic of low-income Americans that, while being eligible for hefty government subsidies on the federal exchange, still have not purchased a healthcare plan.

An analysis by Kaiser Health News (KHN) interpreted the data, and concluded that while 76% of people with incomes between 100 and 150 percent of the official poverty level (between $11,670 and $17,505 for an individual) had enrolled for coverage last year, only 41% from the next demographic (between 151 and 200 percent of the federal poverty line) had 2014 coverage. Those individuals earn between $17,622 and $23,340, and are eligible for significant government subsidies through the federal exchange. Moreover, only 30% who rake in between $23,457 and $29,175 utilized the federal health insurance program.

Now, it is logical that those from the higher income levels do not use the federal exchange, as they can afford their own coverage or are provided some by their employers. And, while the government has done well to advertise their available subsidies and packages to the group right at the poverty line, the fact that only around 40% of those from the next-highest income levels have taken the government up on their financial aid is rather alarming, as they most likely do not have an alternative mode of attaining coverage, and will hence be hit with increasingly stiffer penalties in 2015 and 2016.

So, that begs the question—why is it that those who could benefit from the subsidies simply are not?

Caroline Pearson, senior vice president at Avalere Health, opines that it is because they still do not know about the mandate or the benefits for which they qualify. Her sentiments are felt by many who work in the world of health insurance.

Clearly, the Affordable Care act has done well to insure the poorest sector of the American populous. However, it evidently has room to grow when it comes to assisting those who, while keeping afloat above the federal poverty line, still need significant financial aid in order to practically afford coverage.

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