HELENA – Yes, it’s almost here – the full launch of “Obamacare,” along with worries that it could throw health-insurance markets into disarray as it takes effect next year, creating big price shocks.
But if an analysis released last week by state auditor and insurance commissioner Monica Lindeen is any indication, these predictions of insurance-price chaos won’t be coming true.
In fact, Lindeen’s analysis – conducted for her by an independent actuary – showed that the prices of policies to be sold on a new Internet health-insurance shopping site in Montana will be pretty reasonable.
The actuary also said rates for those policies will actually be less than consumers would have paid for a similar policy without the changes wrought by the Affordable Care Act (the formal name for the “Obamacare” law).
Could this really be true? That health-insurance policies with decent benefits, for which no one can be turned away, no matter their health condition, and that comply with the myriad regulations of the ACA are relatively cheaper than policies now?
We’ll come back to that question in a minute. But first, let’s take a closer look at the analysis and the prices, as presented by Lindeen’s office.
The analysis looked at preliminary rates submitted to her office by the three companies that will be selling on the exchange: Blue Cross and Blue Shield of Montana, PacificSource and the new Montana Health Co-op.
While these rates aren’t final, the companies say they’re a good indication of what those final rates will be.
The exchange will offer five different levels of plans: A high-deductible, low-cost plan for people under 30 and four color-coded plans called Bronze, Silver, Gold and Platinum.
Bronze is the least expensive, with an “actuarial value” of 60 percent. That’s insurance-speak for saying that with a Bronze policy, the insurer covers about 60 percent of the costs of your health care and you pay 40 percent – up to an out-of-pocket annual maximum of about $6,400.
Silver has a 70 percent value, Gold 80 percent and Platinum 90 percent.
The analysis said that for a Silver plan, if you’re 40 years old, you can expect to pay $242 to $310 a month, or an average of $273 – or about $3,300 a year in premiums. The deductible on a Silver policy would probably be about $2,000, insurance officials say, and the insurer would pick up at least 70 percent of the costs after you hit the deductible.
The analysis for Lindeen’s office took the price for a similar plan from 2012, increased that price by the expected percent of medical inflation, and came up with an average price of $290 a month for 2014 – about 6 percent higher than the average of the policies to be sold on the marketplace.
Officials from two of the firms selling on the marketplace said the analysis appears reasonable to them, although many variables can go into pricing.
But regardless of the comparison, they both said the prices listed by Lindeen are the prices they expect to be charging for their policies, which will be unveiled publicly in August.
“We have looked at what (Lindeen) has said about the average pricing in 2014, and know that our policies will fall within those ranges,” said Todd Lovshin, Montana regional director for PacificSource.
And those prices don’t appear dramatically different from prices today, they say.
Whatever those final prices turn out to be, consumers will be paying the same for the same policy, regardless of whether they buy it on the marketplace or not. They’ll also be in a single risk pool for each company.
And if you buy the policy on the Internet marketplace, you’ll also be eligible for a federal subsidy that buys the price down, if your income is between 100 percent and 400 percent of the federal poverty level. The majority of Montana households fit into that window.
So, is it still sounding too good to be true? Perhaps. There are many unknown factors and bumps in the road that we’re bound to encounter, and $273 a month is still $273 a month – not exactly chicken feed.
But regardless of what the politicians and pundits predict, we’ll know soon enough, for the prices and health insurance policies will be out there for all to see, on the Internet marketplace this October.
“We’re excited that the rates will be transparent in Montana, and that people can find out their rate and they can start talking about which company is better for them,” Lovshin says.