By Julie Appleby
Tue, Sep 24 2013
By Phil Galewitz
Just days before new online health insurance markets are set to open, the Obama administration Wednesday released a look at average premiums, saying rates in most states are lower than earlier projected -- and that 95 percent of consumers will have at least two insurers to choose from.
The report - released the same day that President Barack Obama and former President Bill Clinton touted the law’s benefits -- comes as part of a stepped-up administration effort to explain and defend the health law as congressional Republicans target it for defunding.
Until today’s report, little information was available about insurance rates in most of the 36 states whose online marketplaces will be overseen entirely or partially by the federal government because state leaders opted out of running their own.
The analysis showed huge variations among states: A family of four making $50,000 in Wyoming, for instance, would pay $1,237 a month on average for a midlevel plan before subsidies, compared to $584 a month on average in Tennessee. After subsidies are added in, however, the cost to both families would be $282 because the amount they pay is linked to their income, not to the cost of coverage.
While experts say premiums vary across the states and even within states, the analysis pegged the national average for an individual at $328 a month for a midlevel policy called a silver plan, before subsidies are factored in. That’s less than the average $392 projection drawn from earlier data released by the nonpartisan Congressional Budget Office, which will mean savings to families as well as to the federal government for tax credits.
“For millions, these new options will make health insurance work in their budgets,” said Health and Human Services Secretary Kathleen Sebelius.
‘No Clear Political Pattern’
One of the report’s most striking findings is that states like Texas and Florida, where the law has faced fierce opposition despite high rates of uninsured residents, will see rates at or below the national average.
“There is no clear political pattern to these premiums,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a nonpartisan research organization. (KHN is an editorially independent program of the foundation.) “Some conservative, anti-Obamacare states have lower-than-average premiums, and some pro-Obamacare states have higher-than-average premiums."
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.