Studies: Exchanges Competitive, Premiums ‘Lower Than Expected’
The health insurance exchanges created under the Affordable Care Act will foster the emergence of competitive markets, but that market will feature wide variance in premiums among age groups, states and even within states, according to a study released Wednesday by Avalere Health, the AP/Sacramento Bee reports. Further, the study found that many consumers will be satisfied with the health insurance options, particularly if they qualify for a subsidy under the law, while other individuals might have difficulty affording coverage.
The study examined premiums for non-smoking U.S. residents ages 21, 40 and 60 in 11 states and the District of Columbia.
The states were:
- New York;
- Rhode Island;
- South Dakota;
- Virginia; and
Eight of the states will be running their own exchanges, while the federal government will operate the marketplaces in the remaining four. The study did not find notable differences in premiums between the states operating their own exchanges and those run by the government. While the study looked at all four plans available under the Affordable Care Act -- bronze, silver, gold and platinum -- mid-range silver plans are considered the benchmark, the AP/Bee reports.
According to the findings, the average premium for a 21-year-old buying a mid-range policy will be about $270 per month, before taking into account the law's subsidies. Meanwhile, the average premiums for mid-range policies for a 40-year-old and a 60-year-old will be $330 and $615, respectively.
According to the study, premiums for mid-range silver plans range from a low of $203 per month for a 21-year-old in Maryland to $764 for a 60-year-old in Connecticut. Premiums for these plans for 40-year-olds were about $75 more per month nationwide than those for 21-year-olds. However, the study found that there were "some striking price differences" within some states, such as a $418 difference between the lowest- and highest-cost silver plan premiums in New York.
Caroline Pearson, vice president of Avalere, said, "We are seeing competitive offerings in every market if you buy toward the low end of what's available." However, she added that for people who currently do not have coverage, "this is still a big cost that they're expected to fit into their budgets." Pearson also said that the premiums in the states the study examined will be "quite representative" of premiums in other states because the study noted certain clear pricing patterns.
HHS spokesperson Joanne Peters noted that U.S. residents will have options for premiums lower than the averages in the study. She said, "We're consistently seeing that premiums will be lower than expected," adding, "For the many people that qualify for a tax credit, the cost will be even lower" (Alonso-Zaldivar, AP/Sacramento Bee, 9/4).
KFF Study: Premiums Less Costly Than CBO Projections
The study used data from 17 states and the District of Columbia, focusing specifically on the states' largest cities. It examined premiums for young adults, families of four and older couples.
The study found that a 25-year-old in Baltimore will pay $179 per month for the lowest-cost silver plan and $115 per month for the lowest-cost bronze plan. When taking into account federal tax credits under the ACA, the cost of the plans would be $144 and $80, respectively.
Similarly, for a family of four -- including two 40-year-old adults -- the premium for the lowest-cost silver plan would be $683 per month, or $409 with a tax credit. For the lowest-cost bronze option, the family would pay $437 per month, or $164 with the tax credit.
The study stated that "while premiums will vary significantly across the country ... the cost of coverage for consumers and the federal budgetary cost for tax credits will be lower than anticipated" (Viebeck, "Healthwatch," The Hill, 9/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.