With less than a month until the Affordable Care Act's new insurance exchanges open, a new study from the Kaiser Family Foundation says consumers will find "generally lower than expected" premiums as they begin to enroll for health insurance coverage in 2014.
That's good news for the White House, as it ramps up its campaign to encourage people to enroll in the exchanges. The campaign has enlisted everyone from former President Bill Clinton to the Superbowl Champion Baltimore Ravens to the cause in hopes of reaching the self-imposed goal of signing up 7 million Americans for insurance through the exchanges. That's about 15% of the nearly 50 million Americans who don't have insurance, according to the latest data.
"While premiums will vary significantly across the country, they are generally lower than expected," the authors of the study wrote. "For example, we estimate that the latest projections from the Congressional Budget Office imply that the premium for a 40-year-old in the second lowest cost silver plan would average $320 per month nationally. Fifteen of the eighteen rating areas we examined have premiums below this level, suggesting that the cost of coverage for consumers and the federal budgetary cost for tax credits will be lower than anticipated."
Researchers crunched the numbers on what young individuals, families of four, and elderly couples living in major metropolitan areas could pay after analyzing data from 17 states and Washington, D.C., where the exchanges are fully available. The researchers also looked into the role that tax credits would play in lowering monthly costs for lower income individuals and families.
In New York State, which has the most insurer options, monthly costs for a 25-year-old earning $25,000 a year could be as low as $62 a month after tax credits in a lower level "bronze" coverage plan. In Vermont, one of the states with the fewest insurer options, tax credits would ensure that same 25-year-old with a $25,000 a year income could pay nothing in monthly premiums for the lowest-cost bronze plan. A senior couple, with both spouses aged 60 years and an income of $30,000, would also not pay monthly premiums for the same plan.
In fact, that elderly couple would have no monthly premium costs after tax credits in most of the states studied by Kaiser. However, if the couple wanted to upgrade to a silver plan instead, their monthly costs would go up to $150 a month after credits, regardless of which state they lived in.
The upper limit for a family of four with an income of $60,000 would be $409 in all of the states at the silver level after tax credits, the report found.
South Dakota offers the worst deals for single 40-year-olds earning $30,000 a year, tax credits there only drop premiums at the bronze level to $168. For families of four, South Dakota also has the most expensive premiums in the bronze plan at $335 a month. At the other end of the spectrum, Connecticut offers the best deals for both 40-year-olds and families of four at the bronze level, offering premiums of $97 a month and $122 a month, respectively.