Total cost of coverage for members in California's marketplace

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.