WEDNESDAY, Sept. 25 (HealthDay News) -- Americans who buy health
insurance through the new state marketplaces that open on Oct. 1
may see lower premiums than initially projected, federal health
officials said Tuesday.
"Across the board, six in 10 uninsured Americans will be able to find coverage for less than $100 per month," Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services (HHS), said during a news conference.
Also speaking at Tuesday's press briefing, Gary Cohen, deputy
administrator and director of the Center for Consumer Information
and Insurance Oversight at the U.S. Centers for Medicare and
Medicaid Services, said that "overall, about 95 percent of
uninsured consumers live in states with average premiums lower than
Health officials' upbeat forecast is based on a new analysis of
health plan choices and premiums in 36 states where the federal
government is running the new marketplaces or partnering with
states to get those exchanges off the ground. The analysis also
reflects publicly available data in 11 states and the District of
Columbia, where states are running health insurance exchanges on
"Now there will be more choice and more competition thanks to the marketplace, and most consumers will find they will be able to choose from multiple companies when choosing which plan works best within their budget," Sebelius said.
The state marketplaces, also known as exchanges, will serve as a
cornerstone of the 2010 health-reform law known as the Affordable
HHS's report does not include all health plans and rates that
consumers will encounter. It focuses on plans with the lowest
premiums in each state because "consumers are expected to shop for
low-cost plans," the report stated.
But by focusing on the low-rate plans, the report "doesn't give
a complete story as to what the customer's going to be seeing,"
said David Axene, a fellow of the Society of Actuaries, the North
American organization for professionals who analyze financial
Overall, the news on health plan premiums is a mixed blessing
for consumers, health experts pointed out.
"They definitely have good choice in most states, and they definitely have good prices," said Cristine Vogel, associate director in the Chicago health care office of Navigant Consulting Inc., a global consulting firm.
Added Christopher Ryan, vice president of ADP Strategic Advisory
Services in Louisville, which provides benefits administration
services: "Based on the pricing that I've seen here and comparing
it to employer-based insurance, the pricing looks viable."
Compared with job-based health benefits, "the plan is going to
be a little lean and have somewhat higher deductibles than an
employer plan," Ryan added. But for many families, it "would
definitely be an improvement," he said.
People who buy health insurance through the state exchanges will
have a choice of plans across four tiers of coverage: bronze,
silver, gold and platinum. Bronze plans are the least generous and,
while they feature lower upfront costs, they will require consumers
to spend more on deductibles and co-payments or co-insurance.
Premium tax credits available to people with low and modest
incomes will help lower costs.
Federal tax subsidies will be based on the cost of the
second-lowest silver plan available to a consumer. Nationally, the
average premium for the second-lowest-cost silver plan will be $328
before tax credits, the report found. HHS said that was 16 percent
below projections based on Congressional Budget Office
The HHS report said 56 percent of uninsured Americans may pay
out less than $100 per person per month after tax credits.
An average 27-year-old in Texas making $25,000 a year, after tax
credits, could spend $145 per month for the second-lowest-cost
silver plan and $83 for the lowest-cost bronze plan.
Vogel worries that "everybody will gravitate" toward the
low-priced bronze plans without considering the higher
out-of-pocket costs they'll incur when they go to the doctor.
"This is a complex kind of mathematical decision of spending more money now to save it next month," she said.
What's more, in states that are running their own exchanges,
there will be a massive push to educate and assist consumers, Vogel
said. But in states where the federal government is running the
health insurance exchange, often due to state leaders' opposition
to the Affordable Care Act, "there won't be too many boots on the
ground" to help people sort through their options, she said.
In the 36 states that were part of the HHS analysis, consumers
will have an average of 53 health plan choices in their area,
according to the report.
An average of eight different health insurers are participating
in each of those 36 marketplaces, the report said.
What the report fails to point out, Axene said, is the very high
spread between the lowest-cost and highest-cost plans. "Those eight
choices aren't all going to be at that low price," he said.
And just because a plan is low cost doesn't mean it's one that
someone is going to want, he said. "From a consumer's perspective,
they're going to have to evaluate things like, Is my doctor in the
network? Have I heard of that plan before?'" he added.
Axene expects the wide spread between low- and high-cost plans
to narrow in the years ahead as plans settle on a more common
To learn how to get lower costs on health insurance coverage,
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