Feds unveil low premiums on state exchange

Print Friendly and PDF By: Andy Miller Published: Sep 25, 2013

1088819262-1249A family of four in Atlanta with an income of $50,000 per year can buy the cheapest “bronze” plan in the upcoming health insurance exchange for $138 per month.

A 27-year-old living in Georgia who makes $25,000 per year will pay $103 per month for the lowest-cost bronze plan and $145 per month for the second-lowest-cost silver plan, taking into account the subsidies, or income-based discounts, they would receive.

The average premium for the lowest-cost silver plan will be $304, and for the cheapest bronze plan it will be $265 in Georgia, lower than the national average. Those prices don’t take into account the subsidies.

On Wednesday, the U.S. Department of Health and Human Services released the prices of health insurance in the exchanges in Georgia and 35 other states where the exchanges are being run by the federal government. The exchanges are a key component of the Affordable Care Act in the Obama administration’s drive to have more uninsured gain coverage.

Nineteen percent of Georgians currently have no health insurance.

Premiums nationwide will be about 16 percent lower than originally expected, HHS said Wednesday. About 95 percent of eligible uninsured individuals are living in states with lower-than-expected premiums, before taking into account the subsidies that are based on income

Bill Custer, a health insurance expert at Georgia State University, told GHN on Wednesday that because premiums are lower, the cost to the federal government for subsidies will be lower as well. “The costs of Obamacare are less than projected,’’ Custer said.

“Nationwide, these premiums look like what large employers are paying now’’ for health insurance, Custer said.

Oct. 1 will mark the beginning of an open enrollment period that runs for six months, through March 2014. Coverage begins as early as Jan. 1, or 100 days from today.

Plans in the Georgia insurance exchange, or marketplace, are categorized as either “gold,” “silver,” or “bronze.” These vary by the amount of cost sharing — how much the customer must pay in annual deductibles and copayments.

Bronze covers 60 percent of expected costs; silver, 70 percent. Bronze plans have the lowest premiums and the highest cost sharing.

Young adults will also have the option of purchasing a “catastrophic” plan, further lowering their premiums.

The subsidies for younger adults can be substantial. Statewide, the average subsidy for an individual age 26 to 35 choosing a bronze or silver plan would be $316 per month, Custer said.

And the maximum an individual making $12,000 a year would pay for a bronze or silver plan is $20 per month, after the subsidy is counted, Custer added. For a person earning $24,000 in income, that individual would pay no more than $132 per month.

One-third of individual health insurance plans are bought by young people currently, Custer said. Many of them will end up paying a lower cost in the exchange, after the subsidy is included, he said.

Consumers can get help finding coverage through a number of different resources. They can get more information through HealthCare.gov, or in Spanish through cuidadodesalud.gov.

There will also be people in local communities who can provide in-person help with coverage choices.

An analyst told the Associated Press that the administration analysis of premiums is consistent with what the 14 states running their own insurance markets have reported.

But Dan Mendelson, president of the market analysis firm Avalere Health, said the focus on premiums is too narrow. “The analysis doesn’t account for cost sharing,” Mendelson told AP. “This is a limitation.” To get an idea of the true cost of coverage, consumers have to add up premiums and their expected out-of-pocket costs.

“Consumers are going to need to shop,” Mendelson added. “Sometimes a silver offering doesn’t cost much more than a bronze.”

He added two other caveats: Be ready for significant cost sharing, and check carefully that your doctors and nearby hospitals are in the plan’s network.

Custer noted that individuals don’t qualify for a subsidy if they are eligible for any other insurance coverage. So an individual isn’t eligible for this discount if that person’s spouse is offered family coverage through an employer, he said.

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