WASHINGTON, September 25, 2013 – In a calculated bit of political timing, the Obama administration released a report today unveiling Obamacare premiums and plan choices for 36 states where the federal government will be running the program. A spreadsheet drilling down on the numbers—which are subject to revision—accompanies the report. The information was made in the midst of Texas Senator Ted Cruz’ virtual filibuster in opposition to funding the Affordable Care Act’s (ACA’s) implementation.
According to Washington Times reporter Stephen Dinan, Cruz “took control of the floor at 2:41 Tuesday afternoon and crossed the 18-hour, 23-minute mark at 9:04 Wednesday morning, officially passing Sen. Robert La Follette Sr.’s filibuster in 1908.” Despite the efforts of Cruz, Utah Senator Mike Lee and other Republicans, however, Senate Majority Leader Harry Reid (D-NV) vowed to hold a vote on the House budget package with an eye toward stripping out its anti-Obamacare provision.
Undeterred, the White House swung into full campaign mode to promote the benefits of the ACA to a skeptical public with its Obamacare data dump, released under the authority of Health and Human Services Secretary Kathleen Sebelius. Enrollment in the plan is scheduled to commence in all 50 states—including those states administering health exchanges themselves—on October 1, 2013. Implementation is still proceeding despite reports that many states as well as the Federal government itself cannot assure the privacy of individual data at this point.
“The White House is making every effort possible to spin the bad news that seems to come every day, but the American people know that even this rosy scenario is not what they were promised when Democrats were ramming this bill through Congress on a party-line vote,” McConnell spokesman Don Stewart said in a statement.
Regarding those HHS numbers, AP reports that sticker-price premiums for a mid-range benchmark plan will average $328 a month nationally for an individual, comparable to payments for a new car. But that average figure is misleading. Premiums can be considerably higher in many of the 36 states, though the cost may also be subsidized for those in lower income brackets, something that also does not figure into the HHS figures.
HHS estimates that about 95 percent of consumers will have two or more insurers to choose from. The administration claims premiums will generally be lower than what congressional budget experts estimated when the legislation was being debated. However, the administration claims fail to mention the fact that ACA premiums in many cases will actually be higher than what individuals are currently paying for their health plans.
Noting this discrepancy, a spokesman for Senate Republican leader Mitch McConnell, (R-KY), said that premiums that are “lower than projected” are not the same as “lower than they are now.”
Averages, such as those publicized by the administration, can be misleading. When it comes to the new health care law, individuals can get dramatically different results based on their particular circumstances.
Where you live, the plan you pick, family size, age, tax credits based on your income, and even tobacco use will all impact the bottom line. All those variables could make the system hard to navigate.
For example, the average individual premium for a benchmark policy known as the “second-lowest cost silver plan” ranges from a low of $192 in Minnesota to a high of $516 in Wyoming. That’s the sticker price, before tax credits. Some reports have noted that premium prices are tending to skew lower in blue states and higher in red states although the reasons for this are not entirely clear.
Regardless of the state, the big difference among premium levels is “cost sharing” (aka, “co-insurance”) through annual deductibles and copayments, also a feature of most existing plans. In the Obamacare scheme, the Bronze level covers 60 percent of expected costs. Silver covers 70 percent, on up to Platinum (the highest cost), which covers 90 percent. Bronze plans have the lowest premiums and the highest cost sharing.
Differences in plan coverage both locally and nationally as well as the differentiation in plan levels are sure to leave many people scratching their heads. Officials said they’re due to complicated interactions between the tax credits and insurance company pricing strategies in dynamic markets. Complicating matters will be the bewildering array of paperwork each individual or family insured will be required to fill out to get on the rolls for the mandatory coverage.
But Dan Mendelson, president of the market analysis firm Avalere Health, said the focus on premiums is too narrow. “The analysis doesn’t account for cost sharing,” Mendelson said. “This is a limitation.” To get an idea of the true cost of coverage, consumers have to add up premiums and their expected out-of-pocket costs.
“Consumers are going to need to shop,” said Dan Mendelson, president of the market analysis firm Avalere Health. “Sometimes a silver offering doesn’t cost much more than a bronze.”
He added two other caveats: Be ready for significant cost sharing, and check carefully that your doctors and nearby hospitals are in the plan’s network.
–AP contributed to this report
Those interested in viewing the HHS report for themselves may access it by clicking here. Those who wish to drill down further to view premium date by state or download an actual Excel spreadsheet of the data may link here. Note: these numbers do not figure in potential variables such as tax subsidies, which will vary widely subject to state of residency, family size, and income level.
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