Now that health care coverage through the exchanges has been up and running for a several months we are getting more data on the favorable results. A major benefit has been to not only replace policies on the individual market which often had limited coverage with comprehensive coverage that cannot be canceled for development of medical problems, but to also make such care more affordable. A report from the Department of Health and Human Services found wide variation from state to state but found that on average those who receive subsidies are paying $82 a month in premiums, about one-fourth of what they would have paid without the subsidies.
The government has previously reported that 87 percent of the 5.4 million Americans who chose a health plan through the federal health exchange qualified for some financial help.
The health officials said they have not yet analyzed the incomes of people who qualified for the subsidies. But overall, the report shows, the average monthly tax credit this year is $264. Without the federal help, the average premium chosen by people eligible for a tax credit would have been $346 per month, and the subsidy lowered the consumers’ premiums, on average, by 76 percent. The result is that four out of five people with subsidies are paying premiums of no more than $100 a month — although that does not include money they might need to spend for insurance deductibles and other out-of-pocket costs.
An erroneous report in The Los Angels Times claimed that the cost of subsidies was running above current projections received a lot of coverage in conservative blogs this morning but the article has since been corrected to indicate that the cost of subsidies is consistent with projections from the Congressional Budget office.
On average, federal marketplace users can choose from 5 insurers and 47 marketplace plans across all the metal tiers; bronze, which cover 60 percent of health care costs, silver plans, gold plans that cover 80 percent of costs and platinum plans that cover 90 percent.
The report found competition between plan providers lowers premiums. That bodes well for plan prices in 2015 when more plans are expected to enter the marketplace.
McKinsey & Company also looked at choices available in their own study, finding that consumers typically had a choice of both more expensive plans with larger provider networks and less expensive plans with more restrictive networks. They also note that, “There is no meaningful performance difference between broad and narrowed exchange networks based on Centers for Medicare and Medicaid Services (CMS) hospital metrics…” Of course there are reasons beyond quality metrics which might cause people to be willing to pay more for a plan which offers more choice. They also report that 46 percent of those responding to their survey indicated they knew what type of plan they had enrolled in and 26 percent were unaware of the network type they had selected.
The Hill reported on a growing number of insurance companies desiring to offer policies through the exchanges, which will both help lower costs and provide increased choice. As Jonathan Chait points out, this is evidence that Obamacare has been a success, doing what the program was designed to do. The actual news is also quite different from what is being posted at many conservative sites.
While insurance prices through the exchanges are expensive before subsidies are included (and remain expensive for those of us who do not qualify for subsidies), the premiums look much more reasonable when compared to insurance prices prior to the Affordable Care Act, and when the frequent double digit increases in rates were considered. The Commonwealth Club has looked at insurance prices on the individual market prior to Obamacare.
USA Today, in reporting on the HHS report and the increased number of insurance companies planning to offer coverage, points out that “new state filings for the 2015 plan year show more insurance companies are moving onto health care exchanges in some competition-deprived states and requesting rate increases that are largely in line with pre-Obamacare years.”
Choice in physicians is increasing in plans in the exchanges, but United Health Care continues to reduce choice by dropping still more physicians from their Medicare Advantage networks (which is unrelated to Obamacare).
The Los Angeles Times and The Boston Globe are among newspapers reporting on a study from The Journal Of The American Medical Association showing that the Affordable Care Act has resulted in better health care and lower costs for young adults.