There are about six weeks left until the nationwide launch of health insurance marketplaces, a fundamental piece of the Affordable Care Act. A handful of states have come out with their estimates of how much insurance premiums will cost on their exchanges, and in some cases, they have raised more questions than they answer. Here are five things to keep in mind when considering your coverage options. 1. The “sticker price” is not what most people will pay. A few states have released information on what consumers can expect to pay for health coverage on the exchanges in 2014. But for nearly all exchange participants, those rates aren’t what they’ll actually be shelling out, primarily because about 48% of people now buying their own insurance will be eligible for tax credits that would offset these premiums, according to a Kaiser Family Foundation study published this week. (Subsidies will be available for people who have incomes from 100% up to 400% of the poverty level – or about $24,000 to $94,000 a year for a family of four.) “Only the youngest, healthiest people with very high incomes in the individual market – and mostly people in this category aren’t in the individual market because they qualify for group health benefits at work – will pay more across the board in 2014,” says Karen Pollitz, senior fellow at the Kaiser Family Foundation. According to Kaiser, the average premium subsidy (in the form of federal tax credits) will be $2,672 for a family of four purchasing a “silver” tier plan on the individual market. That’s a 32% discount from the plan’s average cost of $8,250. Under the ACA, plans on the exchanges must provide coverage at specific “actuarial value levels”: 60% (bronze plan), 70% (sliver), 80% (gold) and 90% (platinum). This means, for example, the bronze plan covers 60% of medical expenses. The higher the actuarial value, the lower the out-of-pocket costs and higher premiums paid by the consumer. 2. Old coverage vs. new coverage makes it hard to compare plans. Much of the debate over health reform is popping up in states that have estimated consumers will pay higher premiums next year than they do now. For instance, the Ohio Insurance Department said earlier this month that individual exchange plan premiums are expected to climb on average by 41% in 2014 compared to 2013, while plans for small businesses will increase by 18%. The problem with these comparisons is that “it’s completely different coverage – the type of coverage [under Obamacare] is more valuable,” says Linda Blumberg, senior fellow at the Urban Institute. Consumers might pay more for insurance next year because they’re likely getting a richer plan, she says. Under...
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