ESHOO, THOMPSON REINTRODUCE LEGISLATION TO MAKE HEALTH INSURANCE MORE AFFORDABLE FOR FAMILIES IN HIGH COST AREAS

WASHINGTON, D.C. – U.S. Reps. Anna G. Eshoo (CA-18) and Mike Thompson (CA-5) reintroduced today the Fair Access to Health Care Act, legislation to expand the eligibility for premium tax credits for people living in high-cost areas who purchase health insurance through the federal and state exchanges set up by the Affordable Care Act (ACA).

"The Affordable Care Act is helping low to middle-income Americans buy private health insurance with subsidies adjusted to their income level," Eshoo said. "While this is tremendously helpful to millions of individuals and families, there are others in high-cost areas, like those in my home district of Silicon Valley, who cannot benefit because the threshold to qualify for subsidies does not account for the cost of living."

Eshoo continued, "The Fair Access to Health Act ties health insurance subsidies to the cost of living of a geographic area instead of to the national federal poverty level. In doing so, we can expand access to health insurance and improve our nation's health."

"In many communities in our district the cost of living is far higher than the national average," said Thompson. "A middle class income means different things in different parts of the country and that's why the income thresholds set by the ACA need to take cost of living into account. With qualifying income levels set across-the-board, many hard working families in high-cost areas like ours don't qualify for subsides and therefore can't get affordable insurance. This bill will help make health insurance affordable, no matter where someone lives."

Currently the ACA allows those making between 138 and 400 percent of the federal poverty level (FPL) to qualify for premium tax credits to help them purchase health insurance through the ACA's exchanges. At this level, an individual making up to $45,960 and a family of four making up to $94,200 qualify for premium tax credits.

However, the income threshold used to determine eligibility for these tax credits doesn't take into account the cost of living for different geographic areas. A family living in New York City or San Francisco is treated the same as a family living in a small town in South Carolina or Texas. The Fair Access to Health Care Act would allow the premium tax credits offered through the ACA to be increased proportionally based on an area's cost of living.

Under the bill, the federal poverty level threshold will increase proportionally based on an area's cost of living above the national average cost-of-living. The cost-of-living is determined using the Census Bureau's Supplemental Poverty Measure (SPM).

Based on available SPM data, using this calculation:

• In the San Francisco-Oakland-Freemont, California Metropolitan Statistical Area (MSA), a family of four earning up to $125,757 and individuals earning up to $61,356 could qualify for premium tax credits to purchase health insurance through the ACA's exchanges.
• In the Vallejo-Fairfield, CA MSA, a family of four earning up to $109,743 and an individual earning up to $53,543 could qualify for premium tax credits to purchase health insurance through the ACA's exchanges.
• In the Napa, CA MSA a family of four earning up to $116,808 and individuals earning up to$56,990 could qualify for premium tax credits to purchase health insurance through the ACA's exchanges.
• In the Santa Rosa-Petaluma, CA MSA a family of four earning up to $113,746 and individuals earning up to $55,496 could qualify for premium tax credits to purchase health insurance through the ACA's exchanges.

Precedent already exists in the ACA for such cost-of-living adjustments. The ACA accounts for the cost-of-living differences in Alaska and Hawaii by using a higher income threshold to determine subsidy eligibility. The Fair Access to Health Care Act would provide similar adjustments to the other 48 states.

Individuals and families from low-cost geographical areas will not be impacted by this legislation. Those earning up to 400 percent of the FPL would still be eligible for subsides and no region would see a reduction from their current subsidy level.

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