Q: I live in Wyoming, where health insurance is really expensive. Are the subsidies large enough to make insurance affordable here?
A: Yes, the size of the ACA premium subsidy varies depending on where you live. If medical care is extremely pricey in your area, the subsidy rises to keep up with premiums.
The concept behind the subsidies is to even out the cost of premiums and make it so two people with the same income will pay the same amount for the second-lowest-cost plan, regardless of where they live, how old they are, or how healthy they are. So assuming they both have the same income, a younger person will get a smaller subsidy than an older person. That’s because the pre-subsidy premium for the younger person is going to be lower to begin with. And someone living in an area where health insurance premiums are higher than average is going to get a larger subsidy than a person in an area where premiums are low.
In many areas of the country, including Wyoming, the subsidies are particularly large in 2018 (and that will continue to be the case in 2019) because of the way the cost of cost-sharing reductions (CSR) has been added to premiums for silver plans. Some residents are actually able to get free bronze plans because the premium subsidies are large enough to cover the full cost of the plan (since the cost of CSR was added to silver plans in most areas, that drove the price of silver plans higher than they would otherwise have been; premium subsidies are based on keeping the cost of a silver plan at an affordable level, so when silver plan rates go up, subsidies increase as well).