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Health Care Reform:

Health Insurance & Affordable Care Act

Lack of Competition, High Rates in Alabama

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Consumers with incomes of up to about $46,000 for individuals and $94,000 for a family of four get tax credits to help cover the premiums. An online calculator showed Robin Cotton, a Democrat and real estate agent who lives outside Huntsville, that her family's premium for a medium-level silver policy would slightly decline next year after subsidies are included to $282, she said.

Insurers may offer several types of plans under the health law ranging from a bronze policy, which pays 60 percent of an average patient's costs for essential benefits, to platinum, which covers 90 percent of average costs.

With an income of about $76,000 for a household of two, Beth Biggs, 49, a nonprofit executive in Montgomery who describes herself as a political independent, said she won't qualify for subsidies.

Under the replacement silver plan offered by BlueCross, her monthly premium would rise 38 percent to $345 and her deductible would increase from $750 to $2,000. She's not especially mollified by the health law requirement that plans cover essential benefits, eliminate caps on claims and limit annual out-of-pocket costs to $6,350 for single coverage.

"Those of us who were hoping this was going to be a good thing are now realizing we're going to be helping a few people, but we’re going to be hurting so many middle class families," she said. "We just never thought we would be dealing with this. It wasn't even on our radar."

Hardy, 56, a single Republican who runs a storm-shelter installation business, said she won't qualify for subsidies, either. Her monthly cost to cover herself would rise 77 percent to $478, and her deductible would increase by a third, to $2,000.

"I'm going to drop them" and look for a non-BlueCross plan, she said.

That may be difficult. BlueCross is the only carrier selling coverage statewide through the Affordable Care Act’s online marketplace, or exchange. Other carriers, Humana and UnitedHealthcare, hold tiny pieces of the individual coverage market and often offer smaller networks of doctors and hospitals.

'The Stroke Belt'

"Nothing changed in Alabama" after health law provisions kicked in, said Chad Gay, an insurance broker based near Birmingham. "In 2013 you’ve got Blue Cross, United and Humana. In 2014 you've got Humana, Blue Cross - and outside the exchange - United. Same players, higher rates. Great."

Another factor pushing up costs is a high rate of chronically ill residents. Because insurers cannot bar those with pre-existing illness starting next year, many higher-cost consumers are expected to join the coverage rolls.

"There are lots of sick people here," said Michael Morrisey, a health economist at the University of Alabama, Birmingham. "There's the stroke belt" extending across the South "and diabetes and heart disease."

Fri, Nov 1 2013

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