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Small Business Employee Benefits and HR Blog

Health Insurance Subsidy Eligibility Rates by State

More than 8 million people selected a Marketplace plan during the first enrollment period, and the vast majority (85%) were eligible for a health insurance tax subsidy. According to enrollment data recently released by the federal administration, however, the number of people receiving subsidies varies significantly by state.
subsidies_by_state

Which State Residents Received Higher Health Insurance Subsidies?

According to the most recent enrollment data:

  • In Mississippi, Florida, North Carolina, Arkansas, Wisconsin, South Dakota, Wyoming, Idaho and Maine the proportion of enrollees who were eligible for assistance was 90% or more.

  • In the District of Columbia, the percentage of enrollees was 16% and in Hawaii it was 38%.

  • States in the middle included Vermont and Colorado were the rate was around 60%. In Washington, New York, and Kentucky approximately 75% of enrollees were eligible for assistance.

Why the Difference State by State?

The subsidies act as a cap on what you pay for health insurance coverage - between 2% and 9.5% of household income, based on your income. Therefore, the availability of the subsidies is tied to two factors that differ widely from state to state: household income and local insurance prices. 

Income eligibility is based on the federal poverty level (FPL) guidelines. Individuals with incomes between 138% and 400% of FPL are eligible for a subsidy. The FPL is the same for the 48 Border States and D.C., and slightly higher for Alaska and Hawaii. 

Local insurance prices also come into play. For example, see the different health plan rates for the 36 states using the federally-run Health Insurance Marketplace.

Other factors may include:

  • Whether the state expanded eligibility for Medicaid

  • Existing laws and health reforms (ex: Hawaii already requires some employers to cover their employees or pay a penalty, and Massachusetts implemented state health reform in 2006)

Where does your state stand?