Filed Under:Health Insurance, Individual Health

Administration says subsidies cut premiums by 76 percent

Many holders of silver plan coverage are paying less than $50 per month.
Many holders of silver plan coverage are paying less than $50 per month.

The Patient Protection and Affordable Care Act (PPACA) tax credit subsidy has cut the amount exchange plan enrollees pay for monthly premiums to less than $100 for about 70 percent of the enrollees, the administration said Wednesday. The U.S. Department of Health and Human Services (HHS) found that the tax credits reduced the average amount "qualified health plan" (QHP) enrollees actually pay to $82 per month, across all plan types.

The full cost of the coverage averages $346 per month. The tax credits reduce the amount paid by 76 percent.

See also: Witnesses: PPACA income verification is a mess

Consumers who selected silver plans, the most popular plan type in the exchanges run by HHS, paid an average after-subsidy premium of $69 per month. Forty-six percent of the silver plan buyers are paying less than $50 per month.

Roughly 90 percent of the consumers who bought coverage through the federal exchange system got a subsidy. The average exchange user could choose from a menu that featured five carriers and 47 different plans.

See also: PPACA premiums lower than expected

Each additional carrier participating in an exchange lowered premiums for the silver plan by about 4 percent on average, HHS said. “What we’re finding is that the Marketplace is working,” Sylvia Burwell, the new HHS secretary, said in a statement. “Consumers have more choices, and they’re paying less for their premiums. When there is choice and competition, everybody benefits.”

The HHS figures include the 5.4 million exchange users in states with HHS-run exchanges. The figures do not include consumers who bought QHPs through the state-based exchanges.

Originally published on BenefitsPro. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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