By Julie Appleby
Wed, Jul 24 2013
Will premiums go up or down under the health law?
It’s been one of the most contentious questions in recent weeks, as states examine the rates submitted by insurers applying to sell coverage through new online marketplaces that open for enrollment Oct. 1. Critics of the law have argued that new rules, benefit requirements and taxes will drive up costs for many, while supporters say increased competition and transparency, enrollment of more healthy young people and subsidies will moderate premiums.
Now, the Government Accountability Office is weighing in with its own analysis of how much it costs now for policies offered in each of the 50 states.
The report released Wednesday is based on prices reported by insurers to a government database and shows that consumers face a wide range of premium prices, deductibles and annual exposure to out-of-pocket costs, often depending on their age, health history, family size and where they live. It was requested by Sen. Orrin Hatch, R-Utah, the ranking member of the Finance Committee. Congressional Republicans say the law will increase coverage costs for many people.
With some caveats — the data used by the GAO capture only 80 percent of insurers and reflect premiums before insurers add extra charges for such things as poor health — the report is one of the broadest looks at what the estimated 14 million Americans who currently buy their own insurance face on the market today. It also doesn’t figure in the tens of thousands of people with chronic diseases who are unable to buy insurance at any price in most states.
Some of the numbers are eye-popping. In many states, coverage offered to families often does not even kick in until medical costs of $20,000 or more are incurred by the policyholder.
Premiums range widely and the report separates them into lowest, median and highest for each state across six categories based on age and gender and family size. For example, the least expensive plan offered to a family of four in California is $2,832 a year. The median-priced plan for that family is $8,841 and the most expensive is $43,632. Because the data did not include enrollment figures, no one knows how many people buy each of the policies.
Some premiums are quite low: $673 a year for the lowest cost plan available to a 30-year-old nonsmoking man in Colorado, for example. That policy doesn’t kick in, however, until the consumer incurs $10,000 in medical costs, and requires him to pay 50 percent of the costs after meeting that deductible, up to a maximum of $17,500. The median priced plan for that same aged man would cost $2,424 a year, while the most expensive clocks in at $11,439, according to the report.