# Total cost of coverage for members in California's marketplace

## TL;DR

The study examines how much health coverage costs as a share of income for people in California's health insurance marketplace, showing costs decreased from 2019 to 2022.

## Contribution

This paper provides new empirical evidence on the total cost of coverage, including premiums and out-of-pocket expenses, for ACA marketplace enrollees in California.

## Key findings

- In 2022, the average total cost of coverage was 6.6% of household income for households below 400% of the federal poverty line.
- The decrease in cost compared to 2019 was mainly due to lower net premiums, with out-of-pocket costs remaining stable.
- The total cost of coverage is progressively distributed and varies by plan metal tier.

## Abstract

Discussions of coverage affordability within the Affordable Care Act (ACA) marketplaces generally focus on premium costs. However, the total cost of coverage includes out-of-pocket expenses such as copays and deductibles.

Using claims and enrollment data from Covered California, California's ACA marketplace, we document the total cost of coverage for households enrolled in full-year subsidized marketplace coverage as a percent of household income in 2019 and 2022.

In 2022, the average total cost of coverage for households below 400% of the federal poverty line was $2,519, representing 6.6% of household income. In 2019, the average cost of coverage for this population was 8.7%. The decrease was driven by decreases in net premiums, as out-of-pocket costs remained relatively unchanged. We also show that the total cost of coverage as a percent of household income is progressively distributed and varies substantially by plan metal tier.

Overall, our findings indicate that income-adjusted affordability measures established by the ACA have reduced financial burdens for many consumers.

Using claims and enrollment data from Covered California, California's ACA marketplace, we document the total cost of coverage, including both premiums and out-of-pocket costs, for households enrolled in full-year subsidized marketplace coverage as a percent of household income. Our findings indicate that income-adjusted affordability measures established by the ACA have reduced financial burdens for many consumers.