Want cheap Obamacare insurance? Live in Pennsylvania and avoid New Jersey
Insurance premiums rose across the country this year for policies sold on the Affordable Care Act exchanges, but the increases were uneven. Some states saw much larger price hikes than others. And other costs of coverage, like deductibles and co-payments, also varied greatly.
Insurance premiums rose across the country this year for policies sold on the Affordable Care Act exchanges, but the increases were uneven. Some states saw much larger price hikes than others. And other costs of coverage, like deductibles and co-payments, also varied greatly.
The personal finance website GOBankingRates.com ranked states according to the 2016 cost of the cheapest silver tier plan available for a single 40-year-old male non-smoker in a major metropolitan area. The survey considered premiums, deductibles and copayments in its calculations.
The most affordable plan was sold in New Mexico, where the premium was just $181 a month with a $2,000 deductible. The least affordable was sold in New York, where it cost $366 a month with a $3,000 deductible.
Pennsylvania was the fifth cheapest. The hypothetical consumer could have found a plan for $276 a month with a deductible of only $1,500.
It was a different story in New Jersey, which was the fifth most expensive state. The consumer would have paid a monthly premium of $317 with a deductible of $2,500. But what really made the plan expensive the co-insurance rate, which was 50%.
What accounts for the difference in costs across states? The most important factor is competition. Research has shown that exchanges on which more plans compete tend to have lower rates. Pennsylvania has 19 insurance companies selling plans.
Competition was intended to be the primary means for controlling costs on the ACA exchanges based on the theory that markets work. The new survey of insurance rates suggests that the theory is correct.
That doesn't help much if you live in a high-cost state like New Jersey. But it's worth your while to shop around. Deals may still be available.
And people with pre-existing medical condition are still better off than in the days before the ACA went into effect, when they could be locked out of coverage entirely.
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