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Health Care Reform:

Health Insurance & Affordable Care Act

Feds: Affordable Care Premiums Lower Than Expected

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Premium prices are influenced by many factors, including what insurers guess their costs will be, a region’s labor costs and how much hospitals and other facilities charge. Competition between insurers is also a significant factor.

Some rural states, such as Wyoming or Alaska, have fewer insurers and therefore, less competition, which could partially account for the higher prices there, said Joel Ario, managing director at consulting firm Manatt Health Solutions and a former administration official.

Other states with high rates include Mississippi, Indiana, Vermont and Connecticut.

Under the law, insurers can vary rates based on age and are allowed to charge older people up to three times more than younger ones, starting Jan. 1. But insurers cannot charge the sick more than the healthy or reject applicants for coverage if they have a medical condition.

While the administration said the rates show that the new plans will offer consumers affordable coverage, there are caveats. The study used weighted averages, for example, which do not reflect what any one consumer might pay. In addition, many of the highlighted rates in the report are for 27-year-olds, who are on the lower end of the premium cost scale. 

7 Million Expected To Enroll

The insurance marketplaces, which can be used by individuals and small businesses, are expected to enroll 7 million people next year, according to the CBO. Of those, 6 million are expected to qualify for subsidies because they do not have affordable job-based coverage and their incomes are between 100 percent and 400 percent of the federal poverty level. That’s between $11,500 to $46,000 a year for an individual, or up to $94,000 for a family of four. Those who get subsidies must pay between 2 percent and 9.5 percent of their income - on a sliding scale - toward the premium.

While the administration said consumers will have “significant choice” in the subsidized exchanges, data show that in some places only a few insurers are offering plans.

In Alabama, for example, only one carrier is selling through the exchange in most parts of the state. In Missouri only two insurers are offering plans. North Carolina has only two and in some sections, one. In some rural sections of Florida as well as Panama City and the capital of Tallahassee only one insurer is selling exchange policies.  

Tue, Sep 24 2013

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