Why this difference in premium cost?

[tmitchell]

Just curious if anyone can explain this.

For 2022 I purchased a bronze HDHP from blue shield directly for $754/mo because I figured I’d get no subsidy from ACA due to earned income. The renewal for 2023 was bumped up to $902/mo.

I decided to purchase the same plan from ACA for 2023 and it’s $820/mo assuming zero subsidy. Why is there an $80 difference?

 

[COcheesehead]

PTC? Premium tax credit which is different than a subsidy.

 

[Aerides]

You would have to ask your plan provider. There could be other reasons that we can't see here. When did they tell you $902 and where are you now seeing $820?

 

[sengsational]

It's not the PTC because the OP states "zero subsidy".

My guess would be a different zip code or tobacco use, age, or something like that. But I'm curious, because I would expect the price to be the same.

 

[MichaelB]

The same plan at the same location has to have the same price for all takers. The only allowable differences can be for age and tobacco use. The $82 difference it too great for age, so the plans must be different in some way.

One possibility is both are the same health insurance plan, but one includes dental or glasses.

 

[COcheesehead]

It's not the PTC because the OP states "zero subsidy".

My guess would be a different zip code or tobacco use, age, or something like that. But I'm curious, because I would expect the price to be the same.

A PTC is different than a subsidy. I don’t get a subsidy, but I get a PTC.

 

[COcheesehead]

OP, the quote should show the full premium and then any deductions or credits. See what the quote says.

 

[tmitchell]

Mystery solved—my bad. ACA only allows for bronze HDHP apparently and the one I had this year was silver. Doh! Still amazed it went up $150/mo.

 

[teej1985]

A PTC is different than a subsidy. I don’t get a subsidy, but I get a PTC.

It isn't though. They are interchangeable for purposes of ATC.

 

[COcheesehead]

It isn't though. They are interchangeable for purposes of ATC.

Not really. Different set of rules for determining their application.

 

[teej1985]

Not really. Different set of rules for determining their application.

Most people consider the reduced premium (through the PTC) to be the subsidies.

Are you referring to the cost sharing reductions portion only to be subsidies?

 

[COcheesehead]

Most people consider the reduced premium (through the PTC) to be the subsidies.

Are you referring to the cost sharing reductions portion only to be subsidies?

This explains it better than I can.
https://www.kff.org/health-reform/i...m-questions-about-health-insurance-subsidies/

 

[zinger1457]

Not really. Different set of rules for determining their application.

The subsidy is a tax credit so they are the same, you do have the option of taking it upfront and having it applied against your insurance premium or wait until you do your taxes. It's all worked out at the end of the year on IRS form 8962.

 

[EastWest Gal]

Mystery solved—my bad. ACA only allows for bronze HDHP apparently and the one I had this year was silver. Doh! Still amazed it went up $150/mo.

Silver plans have higher premiums, but usually the out of pocket costs are the reduced, and through the ACA you might have cost sharing if your income is low enough. Bronze plans are not eligible for cost sharing. HDHP plans appear to be in the Bronze category only. Unless you are funding an HSA there is no advantage to HDHP plans, and they have higher premiums.

I'm not sure why you are not opting to enroll through your state's ACA program. The plans offered on the individual market are largely the same whether or not you use the ACA.

Premium tax credits (aka subsidies) disappear at around $175K income for a single person and around $350K for a couple. The old ACA cliff reappears in 2026 barring any new legislation.

 

[COcheesehead]

The subsidy is a tax credit so they are the same, you do have the option of taking it upfront and having it applied against your insurance premium or wait until you do your taxes. It's all worked out at the end of the year on IRS form 8962.

One reduces the premium. One reduces the cost of care.

 

[zinger1457]

One reduces the premium. One reduces the cost of care.

So, you're saying the subsidy reduces the cost of care and not your premiums? Please explain how that works. I've been collecting a subsidy from ACA every year since it started and it's always gone against my insurance premiums.

 

[COcheesehead]

So, you're saying the subsidy reduces the cost of care and not your premiums? Please explain how that works. I've been collecting a subsidy from ACA every year since it started and it's always gone against my insurance premiums.

I posted this link above, but you may have missed it. It explains my point better than I can. The PTC reduces the premium. The subsidy in the form of a cost sharing reduction, reduces the cost of service.
https://www.kff.org/health-reform/i...m-questions-about-health-insurance-subsidies/

 

[zinger1457]

I posted this link above, but you may have missed it. It explains my point better than I can. The PTC reduces the premium. The subsidy reduces the cost of service.
https://www.kff.org/health-reform/i...m-questions-about-health-insurance-subsidies/

I read that and that's not what it says. I think your confusing cost sharing reductions with a subsidy.

 

[COcheesehead]

I read that and that's not what it says. I think your confusing cost sharing reductions with a subsidy.

LOL, The article refers to both as subsidies. I can’t explain it any better they they have.

From the article
“There are two types of financial assistance available to marketplace enrollees. The first type, called the premium tax credit, works to reduce enrollees’ monthly payments for insurance coverage. The second type of financial assistance, the cost sharing reduction”

 

[zinger1457]

LOL, The article refers to both as subsidies. I can’t explain it any better they they have.

From the article
“There are two types of financial assistance available to marketplace enrollees. The first type, called the premium tax credit, works to reduce enrollees’ monthly payments for insurance coverage. The second type of financial assistance, the cost sharing reduction”

I can understand why you can't explain it better, you're really digging deep on that one.

 

[COcheesehead]

I can understand why you can't explain it better, you're really digging deep on that one.

I am deep thinker.

 

[teej1985]

This explains it better than I can.
https://www.kff.org/health-reform/i...m-questions-about-health-insurance-subsidies/

You could have just said "Yes, I consider only the cost sharing reductions to be subsidies". The article does not imply that only one of the two forms of financial assistance is a subsidy.

 

[COcheesehead]

You could have just said "Yes, I consider only the cost sharing reductions to be subsidies". The article does not imply that only one of the two forms of financial assistance is a subsidy.

Hindsight is always 20/20. Thanks for pointing it out though. In the end it’s just people arguing over word choice, no?

 

[jimbee]

The HealthCare.gov glossary lists their definition of subsidized coverage as "...Marketplace insurance plans with premium tax credits are sometimes known as subsidized coverage too...".
So, I guess it's only sometimes.
https://www.healthcare.gov/glossary/subsidized-coverage/