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Wednesday, September 25, 2013

What Insurance Premiums Will Cost Under Obamacare

Health and Human Services Secretary Kathleen Sebelius testifies on Capitol Hill in Washington, April 12, 2013. (J. Scott Applewhite/AP)

Department of Health and Human Services Secretary Kathleen Sebelius says “six in 10 Americans who currently lack insurance will be able to find coverage that costs less than $100 a month” in health insurance exchanges set to open next week. Here, Sebelius is shown testifying on Capitol Hill in April. (J. Scott Applewhite/AP)

Starting next week, individuals seeking to buy health insurance as mandated by the Affordable Care Act will be able to check out and sign up for private health insurance plans offered by federally-run health care exchanges in 36 states.

Today the Obama administration unveiled the costs of the premiums that people will pay for the health plans. Costs will vary widely from state to state.

In general, younger, healthier buyers will pay more than they do currently for health insurance while older, less healthy people will pay less.

The average individual premium for the second-cheapest plan, which is called the “silver plan” in these exchanges, ranges from a low of $192 per month in Minnesota to a high of $516 in Wyoming.

Guest

  • Larry Levitt, senior vice president at the Kaiser Family Foundation.

Transcript

JEREMY HOBSON, HOST:

From NPR and WBUR Boston, I'm Jeremy Hobson.

ROBIN YOUNG, HOST:

I'm Robin Young. It's HERE AND NOW. Today we learned about the sticker prices for some of the insurance plans that Obamacare will offer. The Obama administration released the cost of premiums in 36 states, where the federal government will run health care exchanges under the Affordable Care Act.

HOBSON: Prices will vary state to state and depend on how healthy you are, and the average consumer will have 53 plans to choose from. Joining us is Larry Levitt, senior vice president at the Kaiser Family Foundation. And Larry, first of all, let's just set the stage here. Who does this apply to? Who's going to have to look at these plans and decide which one they're going to get?

LARRY LEVITT: Well, that's a great question. I think people are seeing the headlines today about Obamacare premiums released, and they probably think it's premiums for them. And the truth is that for the majority of the population, who now get their insurance through their employer or through Medicaid or through Medicare, these premiums actually don't affect them immediately.

There are for the new health insurance exchanges or marketplaces, which are for people buying insurance on their own or for people who are now uninsured. So it's important, and it's the main way that more people are going to get covered, but for most people they don't have to pay a whole lot of attention right now.

HOBSON: So for the people who are in the market for health insurance and do want to go to these exchanges, I see that they are going to have on average 53 plans to choose from, which sounds pretty time-consuming and potentially frustrating.

(LAUGHTER)

LEVITT: There's no question this is complicated, but you know, much in life is complicated. Doing your taxes is complicated, buying a car, picking a cell phone plan, and there's going to be a lot here that will make it simpler. For example, right now when you go out and buy insurance on your own, you have to fill out a long questionnaire about your medical history because insurers now do something called medical underwriting, where they look at your medical history and they exclude you if you have a pre-existing condition or charge you a higher premium.

That all goes away starting October 1. All insurers have to take everyone regardless of their health, and they can't charge sick people more than healthy people.

HOBSON: And the prices vary dramatically. We see that in Minnesota, on average people would pay $192 a month for the lower-cost plan, but the same level of coverage in Wyoming would be $516 a month.

LEVITT: Right, I mean Tip O'Neill, you know, used to say that all politics is local, and all health care is local too. The premiums vary a lot, mostly because the insurance markets vary a lot. In places like Wyoming and in Mississippi, there are not a lot of insurers competing, and so the premiums tend to be higher. In other places there are a lot of insurers competing for business, and that's brought the premiums down.

HOBSON: And are you restricted to buying insurance in the state that you live in?

LEVITT: You are. You'll buy based on actually your zip code and which insurers are selling in your area, and they'll charge different amounts based on where you live.

HOBSON: And what about young people who may be healthier versus older people who may not be as healthy? Is there going to be a dramatic difference in what people pay for their coverage?

LEVITT: There will. I mean there are a lot of reasons why premiums will vary. One is based on where you live, but it's also your age. Older people can be charged up to three times younger people, which sounds like a lot, but it's actually less than the variation today. Whether you smoke or not will affect your premium. And potentially most importantly your income, because most people who are uninsured or who will be buying their own insurance will receive a tax credit from the federal government, and that tax credit will reduce the premium sometimes significantly for people.

HOBSON: And one of the interesting things about these figures that we're talking about is they are being put out before these exchanges know exactly who's going to sign up for them, which makes you wonder, well, what if only sicker people sign up for these, then don't the numbers go up?

LEVITT: Yeah, I mean insurance is a crystal ball business. You know, what - we pay insurers premiums so that they take the risk. I mean they're the ones who are taking the risk for who's going to sign up and how much health care they use. So how much premiums go up in 2015 will depend critically on who enrolls during this open enrollment period, which starts October 1.

You know, we know sick people who have been excluded from the insurance market are going to be the first ones to line up to buy insurance, but we really need to get young and healthy people into the insurance system as well if we want to keep premiums down.

HOBSON: And we should say the numbers that have been put out by the Obama administration are for the 36 states where the federal government is going to run the exchanges. Do we know about the costs in the other states, where the states are running their own exchanges?

LEVITT: We know about most of those other states. Not all of them have released the figures yet. They should all be out by October 1, when open enrollment starts. And there it's, you know, it's a mix. I mean, again, it really depends on what the market looks like, what the cost of living looks like. Some areas with a high cost of living, with high medical care costs, will see high premiums, you know, even if the state is aggressively doing everything they can to implement the law.

HOBSON: Larry Levitt is senior vice president at the Kaiser Family Foundation, talking with us about the new health exchanges. And as he says, enrollment begins - as he said many times, enrollment begins on October 1. Larry Levitt, thanks so much.

LEVITT: Thank you. Transcript provided by NPR, Copyright NPR.


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  • First Time Caller

    Of course the devil is in the details. What’s included in a silver plan? Here is what I found on the internet:

    Benefits Silver Health Plan*
    Deductible $2,000 Med
    Preventive $0
    Doctor’s Office Visits $45
    Specialist $65
    Generic Rx $25 or less
    Brand RX $50 *after $500 Rx deduct
    Lab Testing $45
    X-ray $65
    Out-patient Surgery 20% *after deduct
    Hospital Stay 20% *after deduct
    ER Visit $250 *after deduct
    Urgent Care $90
    Out-of-Pocket Max $6,350/$12,700 (ind/fam)

    So you pay the premium PLUS $2000 before ANYTHING is covered? Then you pay 20% of costs until the $6350 or $12700 is met? This doesn’t sound affordable to me and is much worse than my current plan which I am told will be fee-ed/taxed out of affordability. This is not what he promised!

    • ldfrmc

      I will pay the premium – much lower with the subsidy for me – less than a third of what I pay now.

      I go to the doctor and pay $45 co-pay for the visit – nothing more. I do not pay $250 for the doctor’s visit.

      Much of what I need is covered by the premium and copays. Preventive services are free. Don’t know how you believe deductibles work.

      My generic Rx is $11.65 for a 90 day supply – it’s over $180 for the same without the coverage.

      Don’t know what you expect from healthcare or insurance. It’s Affordable Care, not Free Care.

      • First Time Caller

        I expect to keep what I had (like he promised) and not have my insurance taxed out of existence because some bureaucrat classifies it a “Cadillac” plan. But I’m glad it works for you. You sound healthy. I hope you stay that way and don’t need surgery. My co-worker just had a knee replaced. The surgery alone would have hit him for the $6350 maximum yearly-out-of-pocket.

        • ldfrmc

          “He” didn’t promise anything other than beginning to reform the healthcare system – medical care, coverage, insurance, rates, records, availability.

          The GOP went out of its way to block every, single, feature of reform, including this week’s 42nd vote to repeal any and all reforms.

          The “compromise” the GOP “let through”? We get a continuation, under multiple, so-called “competitive,” health insurance plans, but not competitive health care plans (actual care) – yet. Reform of healthcare is inching along.

          Without any reform, my premiums – if any insurance company would insure me at all – would be over twice as much as I now pay. What I now pay is 28% of my monthly income. The ACA (Obamacare) cuts my current premium rate to one-third.

          No other civilized country in the world put up with what we have had, or had to put up with blocking needed reforms. Governments and doctors and hospitals, pharmaceutical companies and unions sit down and set limits on prices and services. Then they ask insurance companies to meet market needs for anyone who wants “more” than a fair share. It works just fine, elsewhere in the world.

          American politicians might not get the brain-heart transplant they so desperately need in the rest of the world, but working people and the unemployed get needed care.

          They don’t read Dr. Seuss into official records as a substitute, or to initiate their next run for office.

          • First Time Caller

            “He” didn’t promise I could keep my plan?

            http://www.youtube.com/watch?v=wfl55GgHr5E

          • ldfrmc

            He did not say you could (forever afford to) keep your plan, or that your employer would even continue to offer your plan, or that your doctor would continue to sign onto your plan, or that you would even be employed and offered a plan, or the hospital in your community would sign onto your plan each enrollment year.

            The Republicans had no part of the economy that was presented to Obama taking office in 2009?

            This country is not so rich that over three hundred million Americans can have “their” individual choice of a “plan” and “keep their plan” forever. No President, or any Party, can do that. And only a child would see a President in that way.

            Three Presidents (Johnson and Clinton and Obama) have made it possible for over three hundred million Americans to ALL have the guarantee of being covered by a healthcare insurance plan during their entire lives. The same three Presidents have made it possible for ALL Americans to access available, affordable and appropriate healthcare.

            I’m 64, worked in healthcare all my life, practiced medicine 25 years, and will live to see a fourth Democratic President make the only choice any American has about healthcare a personal choice that serves the individual AND ALL of society.

          • First Time Caller

            When the President said I could keep my coverage, I expected minor changes. He certainly implied that to those that had coverage they liked. If I have to convert to the Silver Plan, those are NOT minor changes. I’m glad you get a subsidy and are going to make out. I guess I get to pay for it. I don’t get a subsidy and I’m not rich. I’m middle class. The middle class get the short end of the stick again.

          • First Time Caller

            And by the way, what is this revisionist history about “The “compromise” the GOP “let through”?” If there was any compromise it was between Democrats and themselves. The so-called Affordable Care Act passed with no Republican votes.

            http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=1&vote=00396

          • ldfrmc

            Final votes, like final scores in a sporting event, or on a child’s college entrance board, say nothing about what happened in shaping the outcome.

            Many Republicans from the Clinton era through Obama’s signature Act played a major role in shaping what was omitted and what appeared in the final bill. Mitt Romney in Massachusetts comes to mind.

            And the Republican leaders in the House and Senate who not only endorsed, but required the individual mandate and states’ insurance reform provisions were not at all silent until a final vote.

            The final bill came out of bipartisan committees. And not all committee votes were solely Democratic Party-line-votes.

          • Dayrider

            you talk reform? why did the libs. make it illegal for Insurance companies to compete across state lines? Instantly doubling my premiums? I live in wyoming and used to get coverage from utah. Just before all of this AFA B.S, I was paying 350 a month for BC BS premium, After AFA, Blue cross Blue Sheild of utah Is not allowed to sell here, Now If I would like a plan, It will cost me 589 a month for what my company offers now! 20% of my income. so 35% to income tax, 20% to health care, Inflation tax, and what ever other back door raping I can’t think of right now, what am I left with! not much, I walk 8 miles a day to go to work. It’s ether that or food for the kids, I spit in the face of all those assholes robing me of my life and income, all of them!!!

  • Linda V

    My husband and I will both be 62 years of age in 2014. I’m disabled by a heart attack and have been unemployed since 2009. He has worked as an electronics technician for more than 40 years and we currently live on his monthly pay with a take-home of only $814 every 2 weeks — that’s $1628 to pay all the bills, buy the groceries, pay our taxes, keep gas in the truck and cover any other unexpected expenses. We live PAYCHECK TO PAYCHECK and have absolutely nothing left over…we have no savings, no bonds, no stocks. Those bastards in Washington who are trying to foist this gimmecky load of crap down our throats need to get back in touch with the reality of how people across the country are having to scratch out a living. Not everyone rests on a family bank account of “old money” or has an unending source of taxpayer dollars to fund their vacations. We have no insurance and we damn sure cannot afford to buy Obamacare. How much of an insurrection is needed in this country to get this STOPPED!

    • ldfrmc

      Disability, your age and income should qualify you for Medicare, before 65.

      Depending on your state of residence, you and your husband may qualify for Medicaid.

      Both situations can be determined by using the state healthcare insurance exchange website – and finding out. Information is better than “insurrection,” any day.

  • Tom Raymond

    Why is NPR lying to it’s listeners?

    Lie #1: There are no subsidies. Subsidies don’t require the recipient to pay all the costs up front, tax credits do. All of the Obamacare subsidies are really tax credits.

    Lie #2: No one will be paying around $200 a month for a silver plan. The cost will really be over $800 a month. $200 and change is the net cost after one waits 15 months or more from the start of their plan to the receipt of their tax refund .

    Stop telling lies. Report the facts. Net costs are not facts, they’re fantasies used to win popular opinion. Tax credits are not subsidies, they’re tax refunds.

    I expect the truth from NPR, not the same propaganda that everyone else is reporting.

    Shame on you.

    • Nannci Willson

      You do not have to wait 15-plus months for the tax credit. It is paid each month directly to your insurer. The monthly bill you see will be the remainder after the tax credit. That’s why some refer to it as a subsidy and others a tax credit. Practically speaking, it’s both. If you understand how it works you’ll realize that NPR is not lying, but probably needs to keep clarifying how this works because it is not like a normal tax credit.

    • ldfrmc

      My current premium (self-employed, semi-retired, local plan): $950.
      That premium on 1-1-14: $1050.
      A Silver Plan that matches what I currently have, starting 1-1-14: $690.

      I pay $303 each month as a premium to the plan. The tax subsidy (credit $387) is paid to the plan each month by the federal government, starting at the same time, 1-1-14.

      (surprise, the $1050 premium I now pay is only $690 total – because everyone has insurance, and plans cannot gouge)

      On April 15, 2015 when I file my federal tax return, I show my actual income and MAGI (modified adjusted gross income) for 2014 and any miscalculation I made in predicting my income is adjusted in the continuing premiums and tax subsidy.

      Very similar to what an employer does for all their employees with the multiple health insurance plans they offer.

      The Republicans wanted a market-based-individual-mandate-responsibility scheme. They got it. Individuals and the government will see what health care cost and what individuals pay, going forward and what plans make as “profits.” And insurance “profits” will be monitored and regulated by more than “whatever the market will bear.” Those “lies” end under the ACA.

      • ah s

        One day you will see where the trail leads. Rep and dems only play good cop, bad cop. Ignore media and rate important decisions 1-10…1 good for health and pocketbook, 10 screwed.
        Your outcomes will be 7-9, if you think otherwise, as you do, time will tell. Hope I am wrong!

  • Ann W

    We have between 6-15 employees depending on our construction work load. Most of our laborers do not have computers, many read neither English or Spanish, so how do they access information and registration for ObamaCare?

  • Sam

    In using the online marketplace, will I be able to see & print out a grid of ALL the options available, with their costs and what the coverage of each option is, so I can make my own comparison? This is what I’m used to doing in shopping for coverage through business associations, and I like to make my own decisions rather than giving the system my parameters and letting it choose what it deems right for me.

  • debrigard

    A question:

    I am a small non-profit in CT with only one full time employee and we would like to provide her with medical insurance taking advantage of any credits or subsidies available to the employer However she resides in RI. Under Obamacare would we be entitled to a subsidy via the CT exchange? Or RI? Where would we apply for such insurance?

  • debrigard

    A question
    I am a small non-profit in CT with only one full time employee and we woul like to provide her with medical insurance taking advantage of any credits or subsidies available to the employer However she resides in RI. Under Obamacare would we be entitled to a subsidy via the CT exchange? Or RI? Where would we apply for such insurance?

  • greenbird

    In the above article, Hobson opens with question about pricing, who does this apply to etc. Larry Levitt replies `…the majority of the population who now get their insurance through their employer, or through medicaid, or through medicare, these premiums actually don’t affect them immediately’ what exactly does this mean? Will the people not using the exchange have to pay more eventually to help fund obamacare?

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