By Michelle Andrews
The good news: Three-quarters of people who were eligible for the most generous financial subsidies on the federal health insurance exchange this year signed up for coverage, according to a new analysis by Avalere Health.
The puzzler: Enrollment dropped off substantially for people with only slightly higher incomes who would also have qualified for significant subsidies.
Stiffer penalties for not having coverage and redoubled efforts to reach out and educate people about the health law and their obligations may be keys to increasing enrollment for people in these income groups, says Caroline Pearson, a senior vice president at Avalere Health.
Subsidies alone aren’t enough, she says.
“The carrots as a standalone don’t work,” Pearson says, referring to subsidies that are available to make coverage more affordable for people with incomes between 100 and 400 percent of the federal poverty level. “You have to make people aware of the mandate, and as the mandate penalties increase that will strengthen the effect.”
Unless they qualify for an exemption, most people are required by the law to have health insurance or face fines. The penalty for not having health insurance in 2014 was the greater of $95 or 1 percent of annual income.