A new study of ACA premiums released by the Kaiser Family Foundation highlights the financial burden placed on middle-class, older consumers who earn too much to receive tax subsidies.
The report speaks to the “subsidy cliff,” the point where people earning over 400 percent of the federal poverty level no longer qualify for tax credits. The cliff is especially hard on people over 50, whose premiums are allowed to be up to three times higher than younger enrollees.
On average, a subsidized ACA premium for a 40-year-old who makes $45,000 per year is $227. For a 50-year-old who makes $50,000, the same plan without a subsidy is $340. Plan premiums vary widely based on location.
“For older people living in very high-premium counties, the affordability gap is much more stark,” according to the report. “In the 28 Nebraska counties with the highest premiums, a 60-year-old making $45,000 would pay nothing in monthly premiums and the same person making $50,000 would pay $1,314 (32% of income) for the lowest-cost plan.”