NEW YORK (CNNMoney)
The Obamacare premiums will cost less than predicted, according to data released Wednesday by the Obama administration.
The release provided the first look into rates for consumers buying individual insuranceon the
36 federally run exchanges.
The national average premium for the benchmark plan will be $328 a month
before subsidies, 16% less than projected by the Congressional Budget Office.
The benchmark is the second-lowest cost "silver" policy for 48 states, upon
which federal subsidies are based.
Related: See the Obamacare insurance rates
Subsidies will offer maximum caps for low- and moderate-income Americans in
the benchmark plans. But for those who opt for other levels of coverage, or make
too much to qualify for subsidies, prices vary widely based on one's age, income
and state.
For instance, a 27-year-old living in Dallas making $25,000 could pay as
little as $74 a month for the cheapest "bronze" plan after subsidies, according
to the Department of Health and Human Services.
But a 60-year-old in Wyoming who makes more than $46,000 a year -- too much
to get a tax credit -- could pay as much as $758 for a similar plan.
The majority of people uninsured today will be able to find a policy for $100
or less a month, taking into account subsidies and Medicaid eligibility, the
administration said
Consumers will be able to start enrolling in the exchanges on Oct. 1, with
coverage beginning in January. Starting in 2014, nearly everyone must have
insurance -- either through their jobs, government programs or the individual
market -- or face a penalty.
The rates released Wednesday do not apply to those who receive insurance
through their employer.
Subsidies: What you'll actually pay for
Obamacare
Most people who are expected to sign up for coverage in the exchange have
incomes up 400% of poverty and will therefore be eligible for federal subsidies.
The lower your income and the more expensive the benchmark plan in your
state, the larger your subsidy. For instance, those making $17,235 a year will
pay no more than 4% of income, or $57 a month, for the benchmark plan. Those
with incomes between $34,470 and $45,960 will pay a maximum of 9.5% of income,
or $364 a month, for that benchmark plan. The federal government will cover the
rest.
But these consumers can put their subsidy toward a cheaper plan than the
benchmark policy and pay less per month. They can also choose a more expensive
plan and pay more.
Anyone earning more than $45,960 would be responsible for the entire tab on
the Obamacare health plan of his choice.
Additional information, including the names of insurers offering plans on the
federal exchanges and the deductibles and co-pays associated with the policies,
has yet to be unveiled. The department just said that the number of plans ranges
from 6 to 169, depending on the area. Consumers will have a choice of as few as
one insurer and as many as 13, based on where they live.
In states where there are only a handful of insurers, premiums are much
higher, said Gary Claxton, vice president at the Kaiser Family Foundation. In
the three most expensive states, Wyoming, Alaska and Mississippi, residents will
only have a choice of two insurers.
Check out Kaiser's calculator to estimate your subsidy
amount.
While the administration's report looks only at monthly premiums, a health
care advisory firm issued a report Wednesday saying that consumers in the
exchange will face high out-of-pocket costs in the bronze- and silver-level
plans. These policies have lower deductibles than gold and platinum plans, but
carry higher cost sharing burdens.
The average silver plan will carry a $2,550
deductible and $30 primary care co-pay, while the typical bronze plan will have
a $5,150 deductible and $39 co-pay, according to Avelere Health. The firm looked
at policies in six states that have released detailed data.
