Late last year I cooked up a simple measure of the value of any given health insurance subsidy: the percentage of the premium paid multiplied by the actuarial value (AV) of the insurance obtained. AV is the estimated percentage of the average enrollee's medical costs paid for by the insurance.
In traditional Medicare, for example, for all but the highest-earning 5% of enrollees, the federal government pays about 85% of the combined premium for Parts A,B and D - which have a combined actuarial value a bit north of 80%. Hence the total subsided share of costs (can we call it TSS?) is about 69%. Employers, according to the Kaiser Family Foundation, pay an average of 82% of the premium for individual insurance and 71% for family coverage. Given an average AV of 82% -- also a Kaiser estimate -- that yields a TSS of 66% for individual coverage and 58% for family.
I've previously estimated (see first link above) that the average subsidized ACA marketplace enrollee obtains a TSS of 59% -- with the federal government picking up an average of 73% of the premium for insurance with an average AV of 81%. Subsidies vary tremendously, however, ranging from 0% for the half of individual market enrollees who don't qualify for any help to over 90% for the lowest income enrollees obtaining silver plans enhanced with Cost Sharing Reduction.
Now, with the help of CBO analysis of the House repeal-and-replace bill, the American Health Care Act, it's possible to compare the federal TSS for people of varying income and ages under the ACA and the AHCA.
In traditional Medicare, for example, for all but the highest-earning 5% of enrollees, the federal government pays about 85% of the combined premium for Parts A,B and D - which have a combined actuarial value a bit north of 80%. Hence the total subsided share of costs (can we call it TSS?) is about 69%. Employers, according to the Kaiser Family Foundation, pay an average of 82% of the premium for individual insurance and 71% for family coverage. Given an average AV of 82% -- also a Kaiser estimate -- that yields a TSS of 66% for individual coverage and 58% for family.
I've previously estimated (see first link above) that the average subsidized ACA marketplace enrollee obtains a TSS of 59% -- with the federal government picking up an average of 73% of the premium for insurance with an average AV of 81%. Subsidies vary tremendously, however, ranging from 0% for the half of individual market enrollees who don't qualify for any help to over 90% for the lowest income enrollees obtaining silver plans enhanced with Cost Sharing Reduction.
Now, with the help of CBO analysis of the House repeal-and-replace bill, the American Health Care Act, it's possible to compare the federal TSS for people of varying income and ages under the ACA and the AHCA.
