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The Obamacare Affordability Gap, How Some Poor and Middleclass are Being Priced Out of Health Insurance

The Obamacare Affordability Gap, How Some Poor and Middleclass are Being Priced Out of Health Insurance

Posted Feb 18, 2014 by Jenifer Dorsey

In theory, the Affordable Care Act was meant to make affordable health insurance accessible to more Americans. Indeed, many can now afford and access health insurance for the first time thanks to Obamacare’s exchanges and provisions such as those prohibiting insurers from denying applicants with preexisting conditions. But for some, affordable coverage remains inaccessible. Geography dictates rates and access to health insurance plans. In some counties, the options are few and premiums are costly, which means many low-income and middle-class individuals and families alike are finding themselves in a quandary.

A USA Today analysis published Dec. 26, 2013, found that:
More than half of the counties in 34 states using the federal health insurance exchange lack even a bronze plan that’s affordable—by the government’s own definition [health insurance that costs less than 8 percent of one’s income]—for 40-year-old couples who make just a little too much for financial assistance.1
Americans who buy health insurance from their state’s exchange have access to income-based financial assistance. Those earning 100 to 400 percent of the federal poverty level may qualify for tax subsidies. Those with incomes up to 250 percent of the FPL may qualify for additional cost-sharing subsidies. In places where options are limited and/or expensive, those who make just above the threshold may find themselves unable to afford health insurance coverage.
On the other end of the spectrum are those who make less than 100 percent of the federal poverty level and live in states that opted not to expand Medicaid to those earning less than 133 percent FPL—as of Jan. 28, 2014 there were 19.2
Florida is one such state. Kaiser Health News on Jan. 27, 2014, drew attention to Hendry County, which has the state’s highest rate of uninsured. According to Kaiser, 35 percent of its 33,000 residents under age 65 do not have health insurance coverage. The state average is 25 percent, the second highest in the nation.3 In Florida, only pregnant women and children qualify for Medicaid. That means many in Hendry County—and others like it—who live below the federal poverty level do not have access to exchange-based financial assistance or the government program that provides no-cost or low-cost health insurance to the poor. In Hendry County, according to Kaiser, 28.7 percent of residents live below the federal poverty level.4 Furthermore, Kaiser reported that the state does not have enough doctors to serve the 1 million Floridians that have gained health insurance coverage and that some have to drive an hour or more just to see a health care provider.
What are the options for those without access to affordable health insurance?
Those who cannot find a plan costing less than 8 percent of their income may apply for a hardship exemption. If granted one, they will not owe the shared responsibility payment—the new tax penalty for not having health insurance. However, the underlying problem remains: They do not have access to affordable health insurance.
These populations may opt to go without it. They may also consider alternative health insurance coverage options such as affordable short term medical insurance, also known as temporary health insurance or a hospital indemnity plan.
While such plans are not considered major medical insurance or minimum essential coverage that fulfills the requirement that most Americans have health insurance, they do provide health care benefits and some financial protection should an accident or unexpected illness occur and require medical care.
To learn more about options such as these, visit healthedeals.com or call 888-839-7679 to speak with a certified health insurance advisor.

1O’Donnell, Jayne and Paul Overberg. (2013, December 26) “Lack Aid? Many Counties Have Only Pricey Plans.” USA Today.
2The Henry J. Kaiser Family Foundation. (2014, January 28) “Status of State Action on the Medicaid Expansion Decision, 2014.”
3Galewitz, Phil. (2014, January 27) “Florida’s Decision Hurts County with Highest Uninsured Rate.” Kaiser Health News.

Jenifer Dorsey is a freelance writer whose specialties include health and fitness, wellness, sports and recreation. She is a competitive amateur track cyclist who also enjoys mountain biking, hiking, camping and other outdoor adventure. Jenifer received a B.A. in journalism from Columbia College Chicago and is an MFA candidate at Naropa University. She lives in Colorado.