Countdown to the Health Insurance Marketplace

Posted by AzBlueMeanie:

SixThe second most frequent question I receive about the Health Insurance Marketplace is when are we going to know the insurance rates in Arizona? The correct answer is October 1.

Late Tuesday, the government issued a report detailing premiums in
states whose insurance markets will be federally run starting Oct. 1, i.e., Arizona, with costs generally lower than prior estimates. The New York Times reports, Officials Offer First Detailed Look at Health Plan Costs:

The Obama administration on Tuesday provided the first detailed look at
premiums to be charged to consumers for health insurance in 36 states
where the federal government will run new insurance markets starting
next week, highlighting costs it said were generally lower than previous
estimates.

[According to data released Wednesday by the U.S. Department of Health and Human Services.]

* * *

The White House sought to focus attention on what it portrayed as the
financial advantages of the health insurance program, which is set to
start accepting customers on Oct. 1.

“I can tell you right now that in many states across the country, if
you’re, say, a 27-year-old young woman, don’t have health insurance, you
get on that exchange, you’re going to be able to purchase high-quality
health insurance for less than the cost of your cellphone bill,” Mr.
Obama said Tuesday, speaking at a health care forum in New York City
with former President Bill Clinton.

For a benchmark plan — the second-lowest-cost “silver plan,” covering 70
percent of projected medical costs for a typical consumer — the average
premium nationally will be $328 a month for individuals, the
administration said in a new report.

For a family of four with an annual income of $50,000, the
administration said, monthly premiums for the second-cheapest plan will
vary widely, averaging $600 in Arizona, $800 in Georgia, $961 in
Indiana, $1,069 in Mississippi, $859 in New Hampshire, $943 in New
Jersey and $656 in Utah.

However, the data provided only a partial picture of the reality that
consumers will face. The government did not identify the insurance
companies offering policies in the federal marketplaces, also known as
exchanges. Nor did it provide any information about the many policies
that will cost more than the amounts cited in its report. Such
information will not be available until the exchanges open, federal
health officials said.

* * *

Insurance experts said the prices reported on Tuesday should be viewed
with caution for several reasons. In many cases, the statewide figures
are averages. The rates may be available only in parts of a state, and
premiums can vary as much within a state as among states.

* * *

Under the 2010 health law, most people buying insurance in the exchanges
will be eligible for federal subsidies in the form of tax credits.
Taking account of these subsidies, the administration said, a family of
four with income of $50,000 will generally be able to buy a silver-level
plan for $282 a month, while a 27-year-old with income of $25,000 will
be able to get such coverage for $145 a month.

“We are excited to see that rates in the marketplace are even lower than
originally projected,” said Kathleen Sebelius, the secretary of health
and human services. Insurance, she said, will be affordable even to low-
and moderate-income people.

Gary M. Cohen, the director of the federal Center for Consumer
Information and Insurance Oversight, said that premiums were generally
lower in states with vigorous competition in their insurance markets and
robust programs to review rates.

Chart: State-by-State
Premiums Under the Affordable Care Act

The Arizona Daily Star published an AP report today, Feds release premiums for Arizona health plans:

Arizonans looking to buy health insurance on federally run marketplaces opening Oct. 1 now have an idea what a policy will cost.

Premiums
released by the Department of Health and Human Services late Tuesday
show the two lowest-cost “silver” plans that pay for 70 percent of
medical costs under the Affordable Care Act will cost $248 and $252 per
month, on average, before tax credits that will cut the price for
lower-income residents. That’s substantially less than the national
average of $310 or $328 for those plans.

The cheapest bronze plan, which covers 60 percent of costs, is $214 a month, compared with a national average of $249.

* * *

About 20 percent of Arizonans don’t have insurance, but at least
300,000 are expected to get Medicaid coverage for the poor starting Jan.
1. That leaves about 600,000 people without insurance, many of them
eligible to buy it through the exchanges.

Costs will vary by age, area and other factors such as smoking.

The
information released by HHS didn’t include premiums by age group or a
list of insurers offering policies in the state. That information will
be available on the federal insurance marketplace website,
https://www.healthcare.gov, starting Oct. 1, unless HHS releases it
sooner. Policies will take effect Jan. 1, and open enrollment ends March
31.

* * *

The Arizona premiums are lower than the national average, according
to HHS. The average premium for a 27-year-old buying a silver plan in
Arizona is $164, compared with the national average of $203.

The lower costs aren’t a surprise because the state has a robust competitive marketplace for health insurance, said Dr. Daniel Derksen, a University of Arizona public health policy and management professor.

“I was expecting Arizona to come in less than the national average, and it has to do with the competition,” Derksen said.

Beginning next Tuesday, individuals will be able to log on to HealthCare.gov to peruse their plan options, apply for
government subsidies, and sign up for coverage effective next year.

UPDATE: Arizona may have as many as 106 plans available, according to Dylan Scott at Talking Points Memo. Final Word On Obamacare Coverage Cheaper Than Expected:

On average, people will have a choice of 56 different insurance plans
— depending on which state you live in, though, that figure could
range from seven (in Alabama) to 106 (in Arizona). The average number of
insurers in a state is eight, though that again ranges from one to 13
in different states.

As for premiums, before tax credits kick in, they will average 16
percent below the Congressional Budget Office's original estimates for a
silver-level plan (which covers 70 percent of costs). The number of
insurers in a state is directly tied to how low premiums will be,
Lambrew noted. Arizona, with an average of 106 plans to choose from, had
the lowest average premium for a 27-year-old adult: $166 a month.
Wyoming, with an average of 16 plans, had the highest average premium at
$342 a month.

But then the tax credits take effect. Those knock the premium for
that 27-year-old, projected to earn $25,000, down to $145 in most
states. For a family of four making $50,000, the credits take the
premium price down from more than $1,000 in some states to $282.

HHS ACA Premium Chart by tpmdocs

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