An Early Look at Premiums and Insurer Participation in Health Insurance Marketplaces, 2014

[Liz]

With open enrollment in new insurance marketplaces set to begin Oct. 1, this analysis provides an early look at insurance premiums in 17 states and DC that have publicly released comprehensive data about their rates and the impact of tax credits that will offset part of the costs for low- and moderate-income families.

An Early Look at Premiums and Insurer Participation in Health Insurance Marketplaces, 2014 | The Henry J. Kaiser Family Foundation

 

[Grouper]

Very interesting data.
The subsidies will have the effect of making the net premium the same for applicants of different ages if they have the same income.
Makes Obamacare more attractive for older applicants and increases the chance that there won't be enough young participants to balance the enrollment....

The $193 for the subsidized Silver plan for a $28,500 income is at or above the cost/ benefit available to under 30 males now, but less than a third of the cost presently available to a 60 year old.

I met with a carrier executive last week who commented that the architect of Obamacare told him they "only considered premiums, didn't consider rates".

What could go wrong?

 

[ActuaryGuy]

Very interesting data.
The subsidies will have the effect of making the net premium the same for applicants of different ages if they have the same income.
Makes Obamacare more attractive for older applicants and increases the chance that there won't be enough young participants to balance the enrollment....

The effect of subsidies can be a little stronger than that. One thing the report did not show is what happens when the subsidy is applied to the LOWEST cost silver plan, which is what folks will be more interested in. There is a leveraging effect so that, at the lowest FPL levels, older people have a lower net premium than younger, rather than the same amount.

 

[Ann H]

The effect of subsidies can be a little stronger than that. One thing the report did not show is what happens when the subsidy is applied to the LOWEST cost silver plan, which is what folks will be more interested in. There is a leveraging effect so that, at the lowest FPL levels, older people have a lower net premium than younger, rather than the same amount.

I was just going to say that, ActuaryGuy, and you beat me to it. Take, for instance a single person making $30,000. Their FPL is 261.10%, their "member share" is 8.37%, so their part of the premium is $209.30.

Let's say the 25 year old has a "benchmark" 2nd lowest cost Silver plan premium of $225. His subsidy is $15.70. ($225.00 - $209.30 - $15.70). He can then apply that to any plan, so let's say he takes the lowest cost Bronze at a premium of $180. His net cost is $164.30.

Same thing for the 60 year old with everything being equal (except the premium cost for the plans). Same income, same percentage of FPL, same "member's share" in both percentage and dollar amounts. However, the cost for the benchmark plan for a 60 year old is considerably higher. Let's say $500. That means the subsidy is $290.70, which s/he can apply like a voucher to any plan. Let's say the lowest cost Bronze plan is $350. His net premium is $59.30 ($350 - $290.70 = $59.30).

So, the 60 year old ends up paying $59.30 for the lowest cost Bronze whereas the 25 year old pays $164.30.

They should have read it before the passed it.

 

[anonymous1]

Cheaper than your cell phone bill.

 

[AllenChicago]

I explained this formula to a 27 year old client who earns $35,000 and pays $126 per month for a BCBS-IL $1,500/100% HSA plan. He'll have to pay (an estimated) $230 for the "richer benefits" Silver plan with a $6,000+ annual out-of-pocket liability and will not receive a subsidy because the $230 premium is only 7.8% of his income.

Now, what do you do? Suggest that this healthy young man get a more expensive, higher out-of-pocket ObamaCare plan anyway...just to be in compliance with the law?

Or, would a $500 deductible 80/20 (total OOP $2,500), 1 year STM for $145 per month be better..even with the 1% penalty? We're going to have a lot of people in this quagmire..especially the youngins.
ac

 

[SamIam]

Hey Allen how are you coming to those figures for IL?

Also did you get my private message I sent you kids/Family care in IL?

 

[AllenChicago]

Hey Allen how are you coming to those figures for IL?

Also did you get my private message I sent you kids/Family care in IL?

I used the Kaiser Health Calculator: Subsidy Calculator | The Henry J. Kaiser Family Foundation
The STM plan/premium is from IHC: http://www.myihcgroup.com

I haven't received any notifications of private messages since this site underwent the major rebuild 3 weeks ago. I'll look around the top of the page. Maybe the notification method/location has changed. I'll respond to your PM just as soon as I can find it.
allen

 

[houcoogster]

I was just going to say that, ActuaryGuy, and you beat me to it. Take, for instance a single person making $30,000. Their FPL is 261.10%, their "member share" is 8.37%, so their part of the premium is $209.30.

Let's say the 25 year old has a "benchmark" 2nd lowest cost Silver plan premium of $225. His subsidy is $15.70. ($225.00 - $209.30 - $15.70). He can then apply that to any plan, so let's say he takes the lowest cost Bronze at a premium of $180. His net cost is $164.30.

Same thing for the 60 year old with everything being equal (except the premium cost for the plans). Same income, same percentage of FPL, same "member's share" in both percentage and dollar amounts. However, the cost for the benchmark plan for a 60 year old is considerably higher. Let's say $500. That means the subsidy is $290.70, which s/he can apply like a voucher to any plan. Let's say the lowest cost Bronze plan is $350. His net premium is $59.30 ($350 - $290.70 = $59.30).

So, the 60 year old ends up paying $59.30 for the lowest cost Bronze whereas the 25 year old pays $164.30.

They should have read it before the passed it.

Very good post as always.
And the thing about this is they know if 18 to 34 year olds don't buy into this we're toast. What will these young people say when they find out they have to pay 3 times what a 60 year old pays when they both have the same income except for the 25 year old doesn't have a paid for house in which to live among many other paid for things.

 

[axeman462]

Very interesting data.
The subsidies will have the effect of making the net premium the same for applicants of different ages if they have the same income.
Makes Obamacare more attractive for older applicants and increases the chance that there won't be enough young participants to balance the enrollment....

The $193 for the subsidized Silver plan for a $28,500 income is at or above the cost/ benefit available to under 30 males now, but less than a third of the cost presently available to a 60 year old.

I met with a carrier executive last week who commented that the architect of Obamacare told him they "only considered premiums, didn't consider rates".

What could go wrong?

tick, tick, tick, tick..............boom................