Prices announced for health insurance under Obamacare
California has announced how much consumers will pay for a selection of health plans offered through the state under the Affordable Care Act, also known as “Obamacare”.
The prices offer a preview of what health care reform is going to look like once it is implemented in states throughout the U.S.
Under the federal health care reform law, Americans who don’t get or can’t afford health insurance through their employer can purchase it through an exchange to obtain coverage at a group rate negotiated by state regulators.
So how much will it cost?
It depends on how much you make.
For example, a 40-year-old in California who needs coverage will pay anywhere from $40 to $300 per month for a mid-level plan, depending on how much income they earn.
And some younger adults may end up paying nothing, depending on their income, as they are less expensive to cover.
At least in California, as well as in Washington, Vermont and other states that have announced coverage prices, it appears that premiums under "Obamacare" may be more affordable than what some previously expected.
Meanwhile, consumer advocates are pleased with the new exchange.
"It's a revolutionary improvement to move from a broken market where people are charged by how sick they are, to a competitive market where people pay what they can afford, based on a percentage of their income, on a sliding scale," said Anthony Wright, executive director of advocacy group Health Access.
"Most consumers buying coverage in the individual market will get financial help and see their premiums go down," Wright added.
The federal health care reform law seeks to extend health insurance to many of the 49 million Americans who do not have it, while also changing how health care is delivered in an effort to reduce the skyrocketing cost of healthcare in this nation.
Those who oppose the law have expressed concern that high premiums would make coverage unaffordable to those who were uninsured – even with federal subsidies.
And, according to California Republican Assemblyman Dan Logue, the more affordable rates announced Thursday do not really signal that the program will work.
"This is like a shell game to me," said Logue, co-chair of the assembly health committee. Logue also predicted that taxes would go up to pay for the subsidies; thus, forcing other prices to rise.
"They're not going to tell you that you're going to pay for it in your gas or your food or going to the show," he added.
So far, there are approximately a dozen states that have set up exchanges, which are essentially large group plans that are a major part of the national health reform effort called “Obamacare”.
In the meantime, numerous other states have also announced prices for monthly premiums.
Going back to the example of a 40-year-old in California, if their income was below poverty level, they could qualify for a subsidy and pay as little as $40 per month for a mid-level plan that would cover around 70 percent of medical costs and all preventive care, excluding any additional costs to cover a spouse or children.
However, the state said that same plan for a 40-year-old in California who earns too much to qualify for a subsidy would cost around $300 per month on average.
Additionally, the total amount such individuals would have to pay per year for co-payments and other out-of-pocket expenses would be limited to $6,350 or less, depending on how much income they earn.
Although they could choose plans that have lower co-payments if they so desire, they would end up paying higher premiums as a result.
By the same token, there are some people, such as those in their 20's who only earn a small or moderate income, whose premiums would be free after factoring in a federal subsidy.
Whatever the case, the exchange will also offer so-called platinum plans that have very low or non-existent co-payments. These plans cost around $500 and do not qualify for subsidies, but if you are a low-wage earner, you can get one for as little as $300 per month.
The largest subsidies go to those who make less than 150 percent of the federal poverty level, or about $17,000 for a single person.
California's exchange will offer coverage from 13 insurers, including Anthem Blue Cross, Blue Shield and Kaiser Permanente.
SOURCE: Covered California, Press Release (May 23, 2013): Covered California Announces Plans and Rates for 2014