Orlando Harmon
Affordability programs are designed to help people who are struggling to pay for healthcare. These programs are typically offered by governments or non-profit organizations and provide financial assistance to those who are unable to afford the cost of medical care and insurance. In the United States, the Affordable Care Act gives states the option to create a Basic Health Program (BHP), which offers health benefits coverage to low-income residents who would otherwise purchase insurance through the Health Insurance Marketplace. Additionally, states like New Mexico have implemented their own Health Insurance Marketplace Affordability Programs to lower premiums and out-of-pocket costs for their residents. These initiatives aim to address the widespread problem of healthcare affordability, where rising healthcare expenses force individuals to make difficult choices regarding their health, groceries, and housing.
Affordability Programs
| Characteristics | Values |
|---|---|
| Medical Affordability Programs | Medicaid and the Children's Health Insurance Program (CHIP) |
| Who is it for? | Low-income people, families and children, pregnant women, the elderly, and people with disabilities |
| What does it offer? | Free or low-cost health coverage |
| How to apply? | Apply through Healthcare.gov |
| Insurance Affordability Programs | Patient Assistance Programs (PAPs) |
| Who is it for? | Low-income individuals with prescription drug coverage |
| What does it offer? | Financial assistance or free drug product |
| How to apply? | Through Pharmaceutical Manufacturer |
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What You'll Learn
The impact of insurance affordability programs on healthcare accessibility
Insurance affordability programs are designed to improve access to healthcare services, which is an important step towards reducing health disparities. These programs aim to provide financial assistance to individuals who struggle to afford the premiums and costs associated with health insurance coverage. By addressing the financial barriers, such programs can increase healthcare accessibility and improve health outcomes for underserved populations.
One example of an insurance affordability program is the Basic Health Program (BHP) in the United States. The BHP, established under Section 1331 of the Affordable Care Act, gives states the option to create a health benefits coverage program for low-income residents. This program targets individuals who do not qualify for Medicaid, Children's Health Insurance Program (CHIP), or other minimum essential coverage due to their income levels. By enrolling in the BHP, these individuals gain access to essential health benefits at a more affordable cost.
Additionally, insurance affordability programs can help reduce racial and ethnic disparities in healthcare access. Historically, racial and ethnic minorities have faced barriers in accessing healthcare due to various factors, including income inequality. By making health insurance more affordable, these programs increase coverage rates among underserved populations, thereby reducing disparities in healthcare access and improving health outcomes for minority groups.
However, it is important to acknowledge that insurance affordability programs are not the sole solution to addressing healthcare accessibility issues. While they play a crucial role, other factors, such as economic, social, cultural, and geographic barriers, also influence an individual's ability to access healthcare services. Therefore, a comprehensive approach that considers multiple strategies and addresses various barriers is necessary to ensure equitable access to healthcare for all.
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The cost of healthcare and its implications for patients
The cost of healthcare is a significant concern for many people in the United States. Out-of-pocket spending has increased substantially over the years, reaching $1,425 per person by 2022, adjusted for inflation. This rise in expenses has been driven by several factors, including an aging population, a higher prevalence of chronic conditions, advancements in medical technology, and expansions in health insurance coverage. These factors have contributed to a higher overall utilization of healthcare goods and services, resulting in increased spending.
The implications of rising healthcare costs are far-reaching and impact both individuals and the healthcare system as a whole. For individuals, the financial burden can be significant, leading to cost-related access barriers and difficult decisions about forgoing or delaying necessary medical care. This situation disproportionately affects those with lower incomes, individuals in fair or poor health, and the uninsured. As a result, many people incur medical debt and experience financial instability, with about half of US adults reporting that affording healthcare is challenging.
To address these challenges, various programs have been established to improve affordability and access to healthcare. One example is the Basic Health Program (BHP), which is authorized by Section 1331 of the Affordable Care Act. BHP allows states to provide more affordable health benefits coverage to low-income residents who would otherwise purchase insurance through the Health Insurance Marketplace. This program targets individuals who do not qualify for Medicaid, CHIP, or other minimum essential coverage, with incomes between 133% and 200% of the federal poverty level (FPL). By enrolling in BHP, eligible individuals benefit from at least the ten essential health benefits specified in the Affordable Care Act, with monthly premiums and cost-sharing charges that are more affordable than those of a qualified health plan in the Marketplace.
Additionally, job-based health plans play a crucial role in making healthcare more accessible. As of 2025, a job-based health plan is considered "affordable" if the employee's share of the monthly premium for the lowest-cost plan offered by the employer is less than 9.02% of their household income. If the premiums are still considered unaffordable for the employee and the household, they may qualify for savings in a Marketplace plan. These initiatives aim to alleviate the financial strain on individuals and ensure that a larger portion of the population can access the healthcare they need without incurring excessive costs.
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Government initiatives to improve insurance affordability
The high cost of health insurance is a significant issue in the US, often leading to people delaying or skipping care, racking up large medical bills, or becoming uninsured. While the Affordable Care Act (ACA) has expanded health insurance coverage and improved access to healthcare services, insurance premiums have risen dramatically across most states in recent years.
In response, the federal government has proposed the 2025 Marketplace Integrity and Affordability Rule, which aims to protect consumers from improper enrollments and changes to their healthcare coverage and establish standards to ensure the integrity of the Marketplaces. The rule also proposes to update the methodology for calculating the premium adjustment percentage to establish a premium growth measure that captures premium changes. Additionally, the rule would allow issuers to require payment of past-due premiums before new coverage takes effect, reducing adverse selection and encouraging continuous coverage.
At the state level, several initiatives are being implemented to improve insurance affordability. Some states are focusing on lowering premiums by increasing the stability of the individual market, implementing reinsurance programs, and providing enhanced state-funded subsidies to certain enrollees. For example, California has implemented a Sustainable Insurance Strategy that aims to improve market conditions, ensure market stability, and address the challenges posed by climate change. The strategy includes measures such as promoting wildfire safety, encouraging insurers to write policies in high-risk areas, and fostering a competitive insurance market.
Other states are addressing affordability by expanding the availability of lower-cost coverage sold outside the marketplaces, although this approach may lead to further increases in marketplace premiums. Additionally, some states have implemented or are developing individual mandate requirements, which can help improve affordability by increasing the number of insured individuals. States like Massachusetts, DC, New Jersey, and Vermont have already implemented such mandates, while others are expected to follow suit.
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The role of subsidies in making healthcare more affordable
Healthcare is expensive, and for people with low to moderate incomes, health insurance can be difficult to afford. The Affordable Care Act (ACA) provides subsidies to lower premiums and insurers offer plans with reduced out-of-pocket (OOP) costs for eligible individuals. These subsidies are available to people purchasing coverage on their own through health insurance marketplaces or exchanges.
There are two types of financial assistance available to marketplace enrollees. The first type is called a premium tax credit, which reduces enrollees' monthly payments for insurance coverage. The second type is called a cost-sharing reduction (CSR), which lowers enrollees' deductibles and other out-of-pocket costs when they visit the doctor or stay in the hospital. To receive either type of financial assistance, qualifying individuals and families must enrol in a plan offered through a health insurance marketplace.
The ACA's enhanced subsidies have made reduced-cost sharing plans more affordable. For example, $0 premium silver plans with very low deductibles are now available to the lowest-income enrollees (those with incomes up to 1.5 times the poverty level). Before the enhanced subsidies, these enrollees would have had to pay about 2-4% of their household income for a plan with a reduced deductible. The enhanced subsidies in the Inflation Reduction Act reduce net premium costs by 44%, on average, for enrollees receiving premium tax credits.
In addition to the ACA, there are other programs that offer affordable health coverage. For example, Section 1331 of the ACA gives states the option to create a Basic Health Program (BHP), which is a health benefits coverage program for low-income residents who would otherwise purchase coverage through the Health Insurance Marketplace. The BHP allows states to provide more affordable coverage for these residents and improve continuity of care for people whose income fluctuates above and below Medicaid and Children's Health Insurance Program (CHIP) levels. Through the BHP, states can provide coverage to individuals who are citizens or lawfully present non-citizens, who do not qualify for Medicaid, CHIP, or other minimum essential coverage, and have income between 133-200% of the federal poverty level (FPL).
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The effect of insurance affordability on mental health
The cost of mental health services has long been a significant barrier to accessing care for people with mental health issues. Despite advancements in mental health parity and state initiatives, mental health services remain inaccessible for millions of Americans who need them. This is particularly true for people of color, people with low incomes, and people with disabilities.
In the United States, insurance companies often employ practices that impede access to mental health care, such as arbitrary medical necessity standards, network inadequacy, and fail-first approaches. The low reimbursement rates for mental health professionals further disincentivize them from accepting insurance. As a result, patients who can afford it are more likely to seek out-of-network mental health services, which can be significantly more expensive. This creates a situation where only those with higher incomes can access mental health care.
The Mental Health Parity and Addiction Equity Act of 2008 was created to address these issues and provide equal coverage and benefits for mental health, substance use services, and physical health. However, insurers have found ways to circumvent these parity rules, and the varying definitions of "medical necessity" across states further impede access, coverage, and affordability of care. While the Affordable Care Act (ACA) has the potential to substantially change insurance patterns and access to care for people with mental health problems, there is still work to be done to ensure that mental health care is affordable and accessible to all who need it.
To improve the affordability of mental health care, policymakers can enforce network adequacy and parity provisions, lower patient costs, and make networking with insurers more attractive for providers. Additionally, closing the coverage gap through Medicaid expansion would increase the number of insured individuals and expand access to health care for millions of people. By strengthening existing parity frameworks, leveraging the ACA's no-cost sharing for preventive service provisions, and developing enforcement mechanisms, policymakers can make significant strides in improving the affordability of mental health care.
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Frequently asked questions
The Health Insurance Marketplace Affordability Program lowers premiums and out-of-pocket costs for most people who get coverage on BeWell, New Mexico’s Health Insurance Marketplace.
The Basic Health Program is a health benefits coverage program for low-income residents who would otherwise be eligible to purchase coverage through the Health Insurance Marketplace. The program gives states the ability to provide more affordable coverage for low-income residents and improve continuity of care for people whose income fluctuates above and below Medicaid and Children's Health Insurance Program (CHIP) levels.
Insurance Affordability Programs are part of the public reporting requirements set forth by the California Welfare and Institutions Code 14102.5.
The biggest threat to health care affordability is the consolidation of medicine. For example, hospitals and other corporate entities are buying up physician practices and then negotiating as a unit with health insurance companies, driving up prices significantly.
