A family of four in West Palm Beach, earning $50,000 a year, could pay as little as $18 a month for health insurance under Obamacare, come January, once their tax credit is added.
The Department of Health and Human Services released the first glimpse into insurance costs by community today, days before Americans will be able to sign up for plans under the controversial law.
Six in 10 consumers will be able to buy health coverage, come Oct. 1, for less than $100 a month, according to the federal government.
The new coverage options will not affect the vast majority of Americans who already receive insurance through an employer.
“The new marketplace is creating increased competition and affordable choices for consumers,” said Gary Cohen, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services.
While state officials warned the law would cause rates to skyrocket in Florida, Tuesday’s analysis showed plan prices similar to the national average. And average rates turned out to be less expensive than earlier government estimates.
“I think you’ll see the Florida rates have come in quite well,” said Cohen.
He criticized state legislators for a law change that removed the insurance commissioner’s power to negotiate down rates for plans offered under the law. But he said the state’s competitive marketplace may have blunted that decision.
State residents will have an average of 102 plan options, compared with 52 in a typical state. Some communities in Florida will have fewer.
Miami residents will have 137 choices compared with 132 in West Palm, Boca Raton and Delray.
Prices may be higher, however, than current plans offered on the individual market, which don’t meet the new minimum coverage standards, and don’t provide services like maternity care or speech therapy.
Subsidies available to most consumers will drive down the sticker prices.
Comparing the new plans to flimsy coverage offered until Oct. 1 is like comparing apple and oranges, Cohen said.
“There’s no good way to compare what was available before and what’s available now,” he added.
The Obama administration has estimated that about 3.5 million of the state’s nearly 4 million uninsured residents will be able to buy a plan through the online marketplace, also known as an exchange. About 3.2 million of them are eligible to receive a federal government tax subsidy to help pay for the plan.
Consumers will be able to choose plans designated bronze, silver, gold or platinum, which all offer the same essential benefits. The higher-level plans, however, offer smaller deductibles and less cost-sharing. An individual’s contribution will range from 40 percent to 10 percent of the costs, depending on the plan they choose.
Subsidies are based on the cost of the second lowest, or silver, priced plan.
Plan prices appear particularly low in some Palm Beach County categories. Take that example of the family of four paying just $18 a month. That same family in the Miami market would pay about $72 a month for the cheapest option.
But the average family of four in Florida, with an income of $50,000 would pay about $104 a month, after receiving a tax credit. That’s more expensive than the national average of $95, but considerably less than a Tampa family would pay. Their rate, after the tax credit, is $165 a month.
Individuals and families with incomes between 100 percent and 400 percent of the federal poverty line are eligible for financial assistance. That’s between $11,490 and $23,550 for an individual. For a family of four, it’s up to $94,200.
Many young Americans will qualify for financial help to buy a plan, but their rates could still be more expensive than those of older individuals, who are statistically more likely to visit doctors more and rack up more medical bills.
The Affordable Care Act reined in an insurance industry practice known as age-rating, whereby older people might be charged many multiples more than younger people of similar health.
Rates now, under the law, cannot be more than three times higher due to age alone.
The HHS report shows a single 27-year-old earning $25,000 would pay $96 a month for coverage, after the subsidy is counted. That sounds like a good deal until it is compared to the cost of a family of four earning $50,000 paying only $8 more a month.
Critics of the law warned that reforms meant to help older Americans would shift the burden to the young and healthy. If that proves to be true, it could compromise the affordability aspect of the Affordable Care Act. If young people find that insurance is just too expensive and don’t sign up, insurers could be stuck with a pool of disproportionately older, sicker clients. Without a balanced rate pool, rates will rise.
As enrollmment begins next week, the Obama administration is renewing its effort to get more states to expand Medicaid.
Thousands of Floridians who might have received health insurance through the program for the poor will learn that their rates are now more expensive than those who earn more than them. The subsidy eligiblity rules were written assuming that every state would expand its Medicaid program. So subsidies were reserved for those too well-off for Medicaid.
But the U.S. Supreme Court left the decision to expand Medicaid in the hands of each state, and Florida decided to pass. So about 1 million state residents are locked out of Medicaid and won’t qualify for a subsidy.
Those who would have been qualified for Medicaid will receieve an alert when they enroll for insurance through the marketplace. It will signal that they could have gotten a better deal if Medicaid had been expanded. The Obama administration hopes that, with a bit of information, state residents will pressure their leaders to sign on for the expansion.
“We expect that once the marketplace is open and it becomes clear that there are more options and better options in states that have expanded … that will inform the discussion in those states” that didn’t, Cohen said.
Rates for plans sold in Palm Beach County are particularly competitive.
For a family of four earning $50,000
$797/month second lowest silver plan before tax credit
$282/ month second lowest silver plan after tax credit
$18/month lowest price bronze plan after tax credit
$220/month second lowest silver plan before tax credit
$145/month second lowest silver plan after tax credit
$72/month lowest price bronze plan after tax credit
The Affordable Care Act and you
For a user’s guide to the health care law for Palm Beach County residents: www.palmbeachpost.com/acaguide
Washington correspondant Laura Green and health reporter Stacey Singer will answer your questions about the Affordable Care Act. Noon Monday at pbpost.com