Report: Texas Leaves ACA Premium Subsidies on Table

Jill Ramirez, the director of outreach for the Latino Healthcare Forum, passes out flyers and explains components of the Affordable Care Act on Oct. 5, 2013.
Jill Ramirez, the director of outreach for the Latino Healthcare Forum, passes out flyers and explains components of the Affordable Care Act on Oct. 5, 2013.

Texans have received an estimated $591 million in premium subsidies to help pay for health insurance through the federal marketplace, but they have left millions of dollars in additional funding on the table, according to a new report by the Kaiser Family Foundation.

As of March 1, the state had 295,000 marketplace enrollees, a large portion of whom have received federal subsidies to help pay for health coverage through the Affordable Care Act. But only 12 percent of Texans who are estimated to be eligible for subsidies have actually enrolled in the marketplace.

The Affordable Care Act requires most individuals to purchase health insurance in 2014, but the federal government is footing part of the bill for some of those who cannot afford to pay for all of their coverage when they apply through the marketplace. During the application process, individuals enter their income to determine whether they are eligible to receive subsidies to help pay for coverage.

To qualify for subsidies, individuals must generally have incomes that range from one to four times the poverty level — $11,490 to $45,960 for an individual and $23,550 to $94,200 for a family of four.

Individuals can accept their subsidy award to cover the annual cost of a plan or choose to receive it as a tax credit when they file their income taxes. Some individuals could be left to pay portions of their subsidies back if their income increases from the amount they estimated on their application.

The report found that Texans, on average, have received $2,440 in subsidies.

The estimates included in the report were compiled using statistics collected by the foundation, the 2012-13 Current Population Survey,  Annual Social and Economic Supplement, and enrollment figures from the U.S. Department of Health and Human Services.

While the report is based on enrollment as reported by the federal government as of March 1, it does not account for individuals who might have selected a plan but have not paid the first month’s premium.

The study indicates that if all states had been able to enroll individuals that qualify for subsidies at a rate of 30 to 50 percent like the five most successful states — Vermont, Rhode Island, California, Connecticut and Washington — an additional $8.6 billion in subsidies would have been picked up.

Gary Claxton, vice president of the Kaiser Family Foundation, said Texas’ share of this additional amount could have been fairly large given the state’s roughly 6 million uninsured residents — about one out of every four Texans — and the margin of how many individuals could qualify for subsidies.

John Davidson, a health care analyst for the Texas Public Policy Foundation, a conservative think tank, said the low levels of subsidized enrollees was no surprise given the liability they could create for individuals if they have to pay them back.

"Nobody wants to pay back $10,000 to $15,000 in subsidies next year," Davidson said.

The ACA’s open enrollment deadline is set to close Monday. Individuals who have begun to apply for health insurance on healthcare.gov but are unable to finish by Monday can qualify for an extension if they attest to have tried to obtain insurance before the deadline during the application process.

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.