Obamacare — September 25, 2013 at 11:46 am

Financial facts: Obamacare premiums will be lower than expected


The third in a series of posts intended to educate and inform.

Why was U.S. Senator Ted Cruz reading Dr. Seuss on the Senate floor when talking about healthcare in America? Probably because there’s a good chance he wouldn’t like what real medical professionals have to say in support of Obamacare.

I know, I promised to stick to the facts. But I couldn’t resist that.

Okay, here are the facts: A new report shows that Obamacare premiums will be even lower than expected — especially in Michigan.

How much will insurance cost me under Obamacare?

It’s going to vary from state to state, and will be based on income and tax credit eligibility, but a new report issued by the U.S. Department of Health and Human Services (HHS) shows that premiums on the marketplaces created by Obamacare are anticipated to be 16 percent lower than originally expected.

CBSNews.com shared this information provided to reporters by HHS Secretary Kathleen Sebelius:

According to the report, six in 10 uninsured Americans will be able to find coverage for less than $100 a month, while the average consumer in one of the 36 states with a federally-run marketplace will be able to choose from an average of 53 different plans. …

… the average premium nationally for the second-lowest cost “silver” plan will be $328 a month before tax credits — 16 percent below projections from the nonpartisan Congressional Budget Office. As many as 95 percent of the uninsured who are potentially eligible to use the exchanges live in states with average premiums below the CBO projections.

The options available to consumers will vary significantly depending on their health care market. In Wyoming, for example, the average lowest-cost bronze plan is $425, while it is $144 in Minnesota. In Jackson, Miss., after receiving tax credits, a 27-year-old could potentially pay as little as $8 a month for a bronze plan.

For those interested in a deeper dive into this, I highly recommend this analysis by Jonathan Cohn. But the bottom-line benefits to healthcare consumers are clear.

This report brings good news to Michigan. According to the Detroit News, Michigan is expected to offer more policies at lower costs than many other states.

Although the state doesn’t plan to officially unveil its final menu of offerings until next week, the outlook is good. The Detroit News indicated that Michiganders will have “an average of 43 plans to choose from — categorized as bronze, silver, gold or platinum depending on whether the insurance company covers 60 percent, 70 percent, 80 percent or 90 percent of health care costs.”

More from the Detroit News:

In Michigan, according to the federal analysis, a 27-year-old will be able to get the lowest cost bronze policy for $146 a month. If that young adult made $25,000 a year, he or she would qualify for a federal subsidy that would lower monthly premiums to $89. A family of four with a yearly income of $50,000 would pay a monthly premium of $282 after tax credits to purchase the second lowest-cost silver plan.

Here’s what Don Hazaert, director of Michigan Consumers for Healthcare, had to say:

The numbers are coming in very strong. I can’t say I’m surprised, because I’ve been watching the national trends and I was expecting a reduction in rates.

I want to emphasize that this is excellent insurance: All of these plans cover maternity, childhood dental and vision. And good luck finding a private individual insurance policy in this state (pre-health reform) that covers all of those services.

More choices, better coverage and more affordable prices add up to one thing: A better deal for healthcare consumers.

[Photo credit: Amy Lynn Smith]