Basing subsidies for health coverage on the federal poverty level doesn’t protect low-income families from rising health insurance premiums, finds a new report by the Kaiser Family Foundation. As premiums for family health coverage more than doubled between 1996 and 2004 and premiums for individual coverage rose 86%, the federal poverty level increased only about 20%. “For a family whose income is just over the eligibility threshold, the share of family income required to purchase health insurance would rise over the period by about 55% for single coverage and by about 68% for family coverage,” said the report. Instead of tying subsidy eligibility requirements directly to FPL, policymakers should consider either increasing the FPL threshold at the same rate as the increase in health insurance premiums, or periodically adjust thresholds to take into consideration health insurance costs relative to income and other costs, recommends the report.
