AFFORDABLE CARE ACT

Insurance cost details vary by state, region

See how the health-care law will impact Michigan, Ohio residents

9/25/2013

WASHINGTON — Ohio residents will pick from an average of 46 plans when the new health insurance marketplace starts on Tuesday, and competition from health insurers means premiums nationwide will be lower than expected, according to a new administration report.

The lower premiums primarily affect midrange coverage under so-called “silver” plans that cover 70 percent of medical costs.

An Ohio family of four with an income of $50,000, for example, could enroll in a silver plan for an average of $282 a month after tax credits, according to the report. Without tax credits the monthly premium would be $768. In Michigan, that same family also would pay $282 monthly after credits, down from $731 before tax credits are factored.

A 27-year-old Ohio resident earning $25,000 would pay $145 for the silver plan with tax credits, and $212 before tax credits.

Premiums (before tax credits) are turning out to be 16 percent less than the Congressional Budget Office predicted in March, 2012. Health and Human Services Department officials came up with that figure after analyzing information from the first 16 states that provided information about proposed or final premiums for the insurance exchanges.

That’s good news to HHS Secretary Kathleen Sebelius, who announced the findings to reporters on a conference call Tuesday.

“In the past, consumers were too often denied or priced out of quality health insurance options, but thanks to the Affordable Care Act, consumers will be able to choose from a number of new coverage options at a price that is affordable,” Ms. Sebelius said.

Republicans such as Rep. Fred Upton of Michigan have been wary of the administration’s figures, saying it has been using “creative arithmetic,” and that premiums for existing policies are skyrocketing as carriers are forced to comply with the Affordable Care Act.

Some provisions of the law are increasing costs by, for example, requiring coverage of pre-existing conditions and blocking lifetime limits on treatment for substance abuse and mental health services.

Current rates can’t easily be compared to those available through the exchange because of those sorts of requirements and because of variations in plans, said Gary Cohen, deputy administrator and director of the federal Center for Consumer Information and Insurance Oversight.

Nationally, 95 percent of consumers will be able to choose from plans offered by at least two different providers, although some areas of the country, including regions of West Virginia, will have only one available insurance provider, administration officials said.

On average, Michigan residents will select from 43 coverage plans, not including catastrophic plans targeted to those under age 30. Choices will vary by region. Columbus offers 29 plans, and the Cleveland area has 45, according to the HHS report.

Plan details won’t be available until Tuesday when the insurance exchange opens. The report did not provide a breakdown for Toledo rates.

Mr. Cohen said prices vary according to the amount of competition from insurance providers and the cost of medical care in each state.

The marketplace offers four coverage levels ranging from bronze to silver, gold, and platinum. Each of those plans includes the same minimum benefits, but premium and out-of-pocket costs differ by level. Bronze plans feature lower monthly premiums, but cover on average 60 percent of medical costs versus the 90 percent covered by a platinum plan.

The report provides some city-specific examples for Columbus and the Cleveland area, illustrating how location within a state can affect cost. The cost of the lowest bronze plan, after a tax credit, for a Columbus family of four making $50,000 is $273 a month, compared with $94 for a Cleveland-area family.

A Columbus 27-year-old earning $25,000 will pay an average of $142 for the lowest bronze plan after tax credits, while a 27-year-old from the Cleveland area pays $93.

In Michigan, a 27-year-old with that income will pay an average of $89 for the lowest bronze plan after tax credits.

Consumers need to look at more than the premium, Mr. Cohen said. They also must evaluate the coverage offered and what their out-of-pocket costs will be for the health care.

He and Ms. Sebelius attributed the lower-than-expected premiums to competition and transparency.

Even as he and Ms. Sebelius touted the Affordable Care Act’s success in reducing premiums, Texas Republican Ted Cruz began a filibuster on the Senate floor. He and other conservatives are trying to block a budget bill, forcing a government shutdown if colleagues won’t agree to defund the Affordable Care Act.

Senate Minority Leader Mitch McConnell (R., Ky.) also wants to block implementation of the act, one the President’s proudest domestic policy achievements.

“Every week it seems there are new reports about glitches that will hurt families, compromise personal information, or expose the American people to fraud,” Mr. McConnell said.

Mr. Cohen said a government shutdown — which could occur Tuesday, the same day the marketplaces open — wouldn’t affect the start of insurance enrollment because it is funded through a mandatory appropriation.

Those who sign up by Dec. 15 can have coverage begin on Jan. 1. The individual mandate that requires people to carry health insurance kicks in April 1.

After that, the uninsured will face an annual penalty of $95 or 1 percent of their taxable income, whichever is greater.

Exemptions are available to people opting out for religious reasons, for those who would have to spend more than 8 percent of income on insurance, and for those who qualify for coverage under the federal Medicaid expansion, but who live in states that haven’t agreed to accept more federal dollars to enroll more people with higher incomes. Ohio has yet to make a decision on Medicaid expansion.

Federal marketplace subsidies will be available to people with incomes between 100 and 400 percent of the federal poverty level, up to $45,960 for an individual, or $94,200 for a family of four.

Most entrants to the marketplace are expected to qualify for subsidies because most uninsured people are unemployed or have low-wage jobs that don’t offer health benefits, agency officials said.

More information about the marketplace can be found at www.healthcare.gov.

The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Vanessa McCray is a reporter for The Blade and Tracie Mauriello is a reporter for the Post-Gazette.

Contact Tracie Mauriello at: tmauriello@post-gazette.com, 703-996-9292, or on Twitter @pgPoliTweets.

Contact Vanessa McCray at: vmccray@theblade.com or 419-724-6065, or on Twitter @vanmccray.