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Friday, September 20, 2013

Study Suggests Premium Rates Will Be Lower than Expected

Erin Snyder

Staff Writer

Earlier this month, the Kaiser Family Foundation, a leading nonpartisan health research organization, released a study suggesting that premiums in the health insurance marketplaces created by the Affordable Care Act will be lower than expected. These results should put an end to fears that premiums will be too high for people purchasing plans through the marketplace.

The study looked at premium estimates from the largest cities in 17 states and the District of Columbia, all of which have already received comprehensive data on insurance rates from companies planning to sell coverage in the new health insurance marketplace. Estimated premiums vary due to factors such as regional differences in the cost of health care and different levels of competition in the health insurance market. However, the study found that overall premiums will be lower than expected nationwide.

For example, Kaiser’s researchers found that 15 of the 18 cities in the study will have lower costs than the $320 estimated monthly premium that Congressional Budget Office data project for the second-lowest cost silver plan (a plan that covers 70 percent of enrollees’ health care costs on average, and for which financial help will be available to make coverage more affordable).

Furthermore, it’s important to keep in mind that the estimates described above look at the full cost of premiums. Financial assistance will be available to make premiums less costly for people who earn up to 400 percent of the federal poverty level ($45,960 for an individual or $94,200 for a family of four). For example, with financial assistance through premium tax credits, a 40-year-old who earns 250 percent of poverty ($28,725 a year) will pay $193 a month for comprehensive health insurance that includes coverage of doctor visits, hospitalizations, prescription drugs, and more.

These numbers show a promising response to those who are skeptical that insurance will be truly affordable when coverage goes into effect in the new health insurance marketplaces on January 1, 2014. Insurance being offered for affordable rates is a cause for celebration, especially for those who were previously unable to get high-quality health coverage and care due to costs.

Open enrollment for coverage through the marketplaces begins on October 1. For more information about how to enroll and how much coverage will cost, please visit or call 1-800-318-2596. 

Study Suggests Premium Rates Will Be Lower than Expected | Families USA


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