U.S. officials share specifics on health plans
Federal officials on Tuesday shared the most detailed information yet on rates consumers can expect to see when the Affordable Care Act's health insurance exchanges go live next week.
Federal officials on Tuesday shared the most detailed information yet on rates consumers can expect to see when the Affordable Care Act's health insurance exchanges go live next week.
The average monthly premium for the lowest-cost "bronze" individual plans will be $229 in Pennsylvania (among the lowest in the nation) and $333 in New Jersey (among the highest), according to the U.S. Department of Health and Human Services. Tax credits that are expected to apply to most purchasers would substantially lower rates in both states.
Nationwide, premiums sold through the exchanges will be 16 percent lower than originally estimated based on data available so far, officials said.
For people who want to buy lower-cost plans - a crucial market because more healthy young adults will help balance out older people with more expensive medical conditions - "there are going to be some good prices out there," said Joel Ario, a former Pennsylvania Insurance Department secretary and consultant for Manatt Health Solutions, who said he had seen some of the state numbers before they were released.
Federal officials cautioned that figures were averages and some data could change. Actual rates for individual companies will not be released until the websites where consumers can shop for insurance start operating.
"You really need to go through the process of filling out the application online" beginning Oct. 1, said Gary Cohen, an official with the Centers for Medicare and Medicaid Services. "People will see the range of plans available base on where they live, their zip code, and they will be able to see the amount they will have to pay net of the tax credit they are entitled to."
Cohen provided the most detailed information for a hypothetical 27-year-old and for a family of four with annual income of $50,000.
The health law established four health plan categories - bronze, silver, gold, or platinum - based on levels of out-of-pocket costs for the consumer.
"A bronze plan is less premium, but more out-of-pocket costs when you see the provider," said Scott Crane, director of employee-benefit services at Tycor Benefit Administrators Inc. in Berwyn. "A silver plan is more premium than bronze, but less out-of-pocket costs," he said.
The monthly premium for the lowest-cost bronze plan for a 27-year-old in the Southeastern Pennsylvania is $195, before a potential tax credit, federal officials said. The lowest-priced gold plan is $250. New Jersey equivalents would be $219 and $303. If that 27-year-old makes $25,000 a year, tax credits would cut the bronze plan to $94 in Pennsylvania and $103 in New Jersey.
The catch is that the bronze plan could require the consumer to pay up to $6,300 out of pocket, Crane said. "If you're young and healthy and you want coverage just in case of the worst-case scenario, then a bronze plan is best," he said.
Health experts warned against drawing conclusions based on partial information. Many details released around the country in recent months by have come with a partisan spin.
The examples released by the administration Tuesday were for people who are younger than average and are likely to pay cheaper rates.
The administration did not release comparisons between premiums on the exchanges and rates that are now available on the private market, saying they are not comparable.
Under the Affordable Care Act, for example, "you can't be denied coverage based on your preexisting condition, and you can't be charged more if, say, you are a cancer survivor," said Heather Howard, a lecturer in public affairs at Princeton University and a former commissioner of the New Jersey Department of Health and Human Services.
As a result, premiums on the exchanges are likely to be higher in many cases than on the individual market now.
New Jersey presents an interesting case. Two decades ago, the state prohibited insurers from considering preexisting conditions and limited how much companies could count gender and other factors. Without the kind of mandate that Obamacare includes, prices went up and healthy young people didn't buy.
The federal law "should be making other states like New Jersey with one big difference: the mandate and the substantial subsidies available," said Joel Cantor, director of the Rutgers University Center for State Health Policy.
Rates in New Jersey rates will remain higher than in many other states because health-care costs there are high, he said.
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@DonSapatkin