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Insurance rates set for Indiana, other states under exchanges

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With new health insurance markets launching next week, the Obama administration is unveiling premiums and plan choices for 36 states, including Indiana, where the federal government is taking the lead to cover uninsured residents.

Before tax credits that work like an upfront discount for most consumers, sticker-price premiums for a mid-range benchmark plan will average $328 a month nationally for an individual, comparable to payments for a new car.

The overview of premiums and plan choices, released Wednesday by Health and Human Services Secretary Kathleen Sebelius, comes as the White House swings into full campaign mode to promote the benefits of the Affordable Care Act to a skeptical public. Congressional Republicans, meanwhile, refuse to abandon their quest to derail "Obamacare" and are flirting with a government shutdown to force the issue.

In Indiana, insurance plans in the coming federal health insurance exchange are expected to run from just under $100 per month for some single adults to close to $1,000 for family of four.

A 27-year-old Hoosier would pay anywhere from $168 for bare-bones "catastrophic" coverage to $332 for the cheapest of the so-called "gold" plans. Federal tax credits will reduce the costs for low-income adults.

The health insurance exchanges are set to open a six-month enrollment period next week in Indiana.

Sebelius stressed the positive in a preview call with reporters. Consumers will be able to choose from an average of 53 plan options when the new markets open Oct. 1 for people who don't have health care on the job.

"For millions of Americans, these new options will finally make health insurance work within their budgets," she said.

A report by her department estimated that about 95 percent of consumers will have two or more insurers to choose from. And the administration says premiums will generally be lower than what congressional budget experts estimated when the legislation was being debated. About one-fourth of the insurers participating are new to the individual coverage market, a sign that could be good for competition.

But averages can be misleading. When it comes to the new health care law, individuals can get dramatically different results based on their particular circumstances.

Where you live, the plan you pick, family size, age, tax credits based on your income, and even tobacco use will all impact the bottom line. All those variables could make the system hard to navigate.

For example, the average individual premium for a benchmark policy known as the "second-lowest cost silver plan" ranges from a low of $192 in Minnesota to a high of $516 in Wyoming. That's the sticker price, before tax credits.

In the three states with the highest uninsured population, the benchmark plan will average $373 in California, $305 in Texas, and $328 in Florida. Differences between states can be due to the number of insurers competing and other factors.

"One surprise is Texas," said Larry Levitt of the Kaiser Family Foundation. "That is a state that has put up roadblocks to implementation, but the premiums there are below average."

The second-lowest-cost silver plan is important because tax credits are keyed to its cost in local areas.

But consumers don't have to take silver. They can pick from four levels of coverage, from bronze to platinum. All the plans cover the same benefits and cap annual out-of-pocket expenses at $6,350 for an individual and $12,700 for families.

The big difference is cost sharing through annual deductibles and copayments. Bronze covers 60 percent of expected costs; silver covers 70 percent; on up to platinum at 90 percent. Bronze plans have the lowest premiums and the highest cost sharing.

The administration report found that factoring in tax credits, a 27-year-old making $25,000 a year would see the premium for the benchmark silver plan drop to $145 in nearly every state. But if that hypothetical young adult used the tax credit to buy the cheapest bronze plan, he or she could cut the monthly premium to $74 in the Dallas-Fort Worth area, $102 in Orlando, and $119 in Pittsburgh.

For a family of four making $50,000, the tax credit would cut the monthly premium for the benchmark silver plan to $282. But if the family used its tax credit to buy the cheapest bronze plan, the premium would be $26 a month in Dallas-Fort Worth, $126 in Orlando, and $209 in Pittsburgh.

In the Washington, D.C., metro area, the hypothetical family could find a zero-premium bronze plan, while the lowest an individual could get after applying their tax credit would be $66.

Such differences are sure to leave many people scratching their heads. Officials said they're due to complicated interactions between the tax credits and insurance company pricing strategies in dynamic markets.

Another outside analyst said the administration analysis of premiums is consistent with what the 14 states running their own insurance markets have reported.

But Dan Mendelson, president of the market analysis firm Avalere Health, said the focus on premiums is too narrow. "The analysis doesn't account for cost sharing," Mendelson said. "This is a limitation." To get an idea of the true cost of coverage, consumers have to add up premiums and their expected out-of-pocket costs.

"Consumers are going to need to shop," Mendelson added. "Sometimes a silver offering doesn't cost much more than a bronze."

He added two other caveats: Be ready for significant cost sharing, and check carefully that your doctors and nearby hospitals are in the plan's network.

Starting Jan. 1, virtually all Americans will be required to carry health insurance or face fines. At the same time, the health care law will prohibit insurance companies from turning away people in poor health, or charging them more. And it will limit what insurers can charge their oldest customers.

Experts say the plans under the health care law are not comparable to what's currently sold on the individual health insurance markets, because the coverage is broader and the financial protection for policyholders is more robust. However, experts say the networks will have far fewer options when it comes to providers.

Obama is directly engaging in the promotional campaign for the health care law. Tuesday, he and former President Bill Clinton talked health care during a session sponsored by Clinton's foundation. And Obama is planning a speech on the law on Thursday.

In response to the administration's premium and plan-choice information, a spokesman for Senate Republican leader Mitch McConnell, R-Ky., said that premiums that are "lower than projected" are not the same as "lower than they are now."

"The White House is making every effort possible to spin the bad news that seems to come every day, but the American people know that even this rosy scenario is not what they were promised when Democrats were ramming this bill through Congress on a party-line vote," McConnell spokesman Don Stewart said in a statement.

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  • No Rate yet?
    Rates have not been released in Indiana. It blows me away that article are be released and they have not seen any actual rates for Indiana. We may not even have the rates on 10-1
  • Uhhhh John
    Tax rates are at a 50-year low.
  • Let the market work
    I'm assuming that most readers here are business people. Dont you think the payers have prices high enough to cover their costs? They have a tough job in that they dont know how many people will buy their plan. Then will they get adverse selection? Eventually, there will be historical data the actuaries can use. They will want to price it low enough to sell but high enough to cover costs and make money. I beleive the market will work, but the first iteration is going to have some goofy things.
  • Reply to Elaine
    Elaine, You make a good point. But what I get out of it is this is why people will need the help of Navigators. If properly trained, navigators should help people make decisions that are good for them.
  • Fun To Read
    People have had three years to read and try to understand the ACA, and the majority of the readers are not attorneys and/or healthcare insurance providers, so some people listened to the rhetoric from the left and right of center. Now we will see and hear the rest of the story. For example, the Pharmaceutical Industry agreed to pay into the Federal Fund, $8 Billion per year for the next ten years, in exchange for a Federal Block on the Reimportation of prescription drugs. Currently, anyone can purchase expensive medicine from qualified pharmacies in countries such as Switzerland. Many high priced drugs, not included in the Prescription Formulary of the Healthcare Insurance Providers, can be purchased for savings of 40-60% below the price at local pharmacies in the US. The long term solution is a single pay plan, but I am guessing that the pharmaceutical, healthcare insurance, and medical device lobby will offer billions more to stop that idea from making it to the floor of the Congress and Senate. The one thing I truly like about the ACA is guaranteed access to healthcare insurance for those with preexisting conditions.
  • Bring down costs
    Two nights in the hospital with no significant procedures (an x-ray, an MRI, and a few IVs with really cheap, long established drugs) shouldn't cost $18,000. Will the Obamacare provisions do anything to address this? I frankly have little to no idea. But at this point, it's hard to imagine the system getting worse. So, let's give it a whirl and see.
  • Uhh your all forgetting something
    Taxes are going through the roof so this is going to cost you regardless; nothing is free didn't your parents remind you?
    • rates will vary
      Josh and Pamper -- like everything else, your own rates will vary depending on the circumstances. Y wife and I are currently in a 10K High Deductible plan for which we each pay about $500 per month.....based on last year's income tax return, we will be eligible for a rather significant tax credit under Obamacare, so yes, our rates will be lower....it all depends on your own circumstances, your AGI and what kind of plan
    • 53 choices???
      The average uninsureds will have no idea on how to navigate anything this complicated. The whole program is hard to understand for most CFOs, let alone the disadvantaged folks that currently have no insurance. What a crock!!
      • Deductible's, co-pays, prescription co-pays, dental and vision coverage, and other types of coverage are all hugely important details in all this. But all that aside, the article says a family of four in Dallas would pay $282/month premium for a silver plan, but if they take a bronze plan (lowest coverage possible) they would only pay $26/month!?! I realize those are two different plans, but that amounts to $256/month in tax credits...$3072/year in tax credits. How can this possibly work financially?
      • Devil in the Details
        All this article is talking about is premiums. That may be saving some from a premium stand point, but what are the details of the coverage. If the deductible is say around $10,000 per person, then that isn't really a savings because the first $10,000 is coming out of the patients pocket. Then what is the co-pay after that. Is it 80/20 or 60/40? That will make a difference too. How about prescriptions? Are those covered or is it a separate cost and are there caps for prescription drugs or only certain drugs covered? These questions are what matter, not necessarily monthly premium. Great I am only paying $100 per month for insurance, but I have a $20,000 deductible, 60/40 after that, and no prescription drug coverage, but I am only paying $100 a month. Whoohooo! Before we start celebrating let's see how good the coverage is first.
      • Re: Any Reaction from Pence?
        Did you read the article? It only said that the rates will be less than expected, not that they will be less than the current rates. In fact, I just looked up my rate and see that it will be higher than the rate I currently pay in the private market.
        • Have you checked?
          Have you all done some checking on your own? Yes, the initial premium with tax credits may be low, but the deductible in any of their plans will be $6350 per year and for bronze which is the lowest plan with the least coverage cost sharing is 60-40, meaning the patient will still end up paying 40% of the bill. None of my patients can afford that. Anyone wanting to get an estimate on what it will cost them can go to the Kaiser Family Foundation's website kkf.org/interactive/subsidy-calculator.
        • Any Reaction from Pence?
          Just can't wait for the reaction by the Pence idealogues when people realize that their premiums will be much less than current rates. I am sure Pence, his Insurance Dept cronies and the GOP will find something wrong with the rates, but what can you expect from an administration that lauds its own Healthy Indiana Plan that results in making thousands of Hoosiers ineligible and still leaving hundreds of thousands of Hoosiers uninsured. As Pence says, there's always the hospital emergency rooms.

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