Obamacare Bringing Lower Than Expected Insurance Costs

The right wing blogs and publications continue to spread scare stories such as that insurance costs will rise under the Affordable Care Act, often using funny math and outright lies. The Affordable Care Act has already cut costs for many people with measures such as requiring coverage of routine preventative studies to covering young adults up to age twenty-six on their parents’ policies.  The most important savings is that insurance coverage cannot be lost–a problem which has been a widespread cause of bankruptcy in t his country. As we are now getting more data, we are finding that insurance coverage which will soon be offered on the exchanges will cost less than many predicted based upon information released in a report from the Health and Human Services Department.

According to the new report, the average premium nationally for the second-lowest cost “silver” plan will be $328 a month before tax credits — 16 percent below projections from the nonpartisan Congressional Budget Office. As many as 95 percent of the uninsured who are potentially eligible to use the exchanges live in states with average premiums below the CBO projections.

The options available to consumers will vary significantly depending on their health care market. In Wyoming, for example, the average lowest-cost bronze plan is $425, while it is $144 in Minnesota. In Jackson, Miss., after receiving tax credits, a 27-year-old could potentially pay as little as $8 a month for a bronze plan.

In the federally-run exchanges, states with the lowest average premium tend to have a higher average number of issuers offering qualified health plans, according to HHS. Those 36 states have an average of eight different health insurers participating in the exchange system. About one in four of these insurance companies are offering health plans on the individual market for the first time ever, signaling that insurers are eager to compete for the new business, Gary Cohen of the Centers for Medicare and Medicaid Services told reporters Tuesday.

Cohen said consumers will have a “good and very transparent shopping experience” on the exchanges, contending the range of options shouldn’t be too confusing.

“We have requirements that there be a meaningful difference between plans available,” he said. “Consumers will be able to make side by side comparisons… they’ll be able to select the characteristics of the plan they want to see.”

The exchanges will offer a choice of platinum, gold, silver, and bronze plans which vary based upon coverage and out-of-pocket expenses. Those with chronic diseases which require frequent health care expenditures might be better off with the more expensive plans. For others it will be a choice based upon affordability and how much risk they want to take with higher deductibles or copays.

Cost should not be the only consideration in choosing a plan. There is valid concern as to which doctors will be included in each plan, as insurance plans might be motivated to limit choice in the hopes of keeping costs down. Current laws rules require all plans on the exchanges to offer a sufficient number and a variety of physicians in their networks. It will be necessary for those who are concerned about keeping their own doctor to investigate this before signing up for a plan–considering both their preferred primary care physicians and the specialists they want access to.

I suspect that in many areas there will continue to be nearly as large a choice for consumers as they have now (which does mean potential limitations, as are currently experienced). Physicians have joined together into networks to jointly negotiate with health care plans. The network I practice in includes virtually every physician in town making it hard for insurance companies to limit choice. Another concern is how the plans created for the exchanges wind up paying physicians. If they attempt to pay poorly to keep costs down, it is possible that many physicians will decide not to accept the plan.

Location will also play a part in how much the premiums are for a variety of reasons, including actions by some Republican controlled state governments to attempt to sabotage the Affordable Care Act and taking actions which lead to higher costs.

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