Federally Run Exchanges to Offer More Plans and Lower Premiums Than Predicted

by Patrick Riley 25 Sep 2013
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Health and Human Services (HHS) released a highly anticipated report today on health plan premiums and participation in the 36 states where the federal government is fully or partly running the new insurance marketplaces. The report indicates that consumers in these states can expect a robust portfolio of health plans to choose from with lower than expected premiums. In fact, "when the exchanges open for enrollment October 1st, individuals and families will have an average of 53 plan choices, almost everyone will have a choice of two or more insurance issuers, and the average premium national for the second-cheapest silver-tier plan will be $328 a month without a federal premium subsidy - 16% lower than projections based on Congressional Budget Office estimates."

The report goes on the say, those who receive federal tax credits, 56% of uninsured American may pay less than $100 a month, per person for coverage which includes Medicaid for states who are expanding Medicaid. The number of local plans will average between 1 and 13. Premiums are anticipated to be lower in states that have more plans, the report indicates.

With this report, we are beginning to see that prices will be affordable and with tax credits, even more afforable. Yet, there is quite a range between states in premium rates. The second-lowest cost or silver-plan premium ranges from $192 in Minnesota to $250 in Oregon to $403 in Indiana to $516 in Wyoming. However, the report only addresses premiums and not any additional or related monthly charges.

This is a surprising revelation by HHS for most analysts. The lower premium plan, or the bronze-plan appears to be an extremely attractive option for families and individuals and in the case of some states, Alaska, Mississippi and Fairfax County, Virginia a family of four earning $50,000 a year with the tax credit will pay $0 for the bronze plan a month.

You can follow me on Twitter @Patrick_FrostHC.

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