by: Bruce Shutan
A 40-year-old Californian reportedly would pay anywhere
from about $40 to $300 per month for a mid-level health plan in the state’s HIX,
depending on the individual’s income. But there’s more to the story than these
modest numbers reveal.
Anthony Wright, executive director of the advocacy group Health Access,
recently told Reuters that the premium projections represent “a revolutionary
improvement to move from a broken market where people are charged by how sick
they are, to a competitive market where people pay what they can afford, based
on a percentage of their income, on a sliding scale.”
Not exactly, according to California Republican Assemblyman Dan Logue, who
compared the rates to “a shell game” and predicted that a tax hike would be
needed to fund subsidies, which would trigger higher prices at the gas pump,
grocery store and other venues.
Thirteen of the more than 30 health insurers that had applied to participate
in the California Health Benefit Exchange will offer coverage in the HIX. Peter
Lee, the exchange’s executive director, has noted that residents can expect to
pay up to 29% less than current rates for small businesses.
The public exchange rates being reported in California and some other states
across the U.S. do not necessarily reflect what individuals may pay once their
age, location, smoking status and income are all factored into the mix, cautions
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans. Another
consideration is the regulatory environment that’s in place in each of these
states.
“Many people are going to be required to purchase coverage that’s much more
comprehensive, but also more expensive than what they’re purchasing today,” he
says. A recent Milliman report estimated that premiums could climb an average of
30% next year for many of the roughly 1.3 million middle- or higher-income
Californians with individual-market coverage.
Conspicuously absent from the recent announced rates in California is how
they compare to what people are paying today, which Zirkelbach says could vary
significantly from one individual to the next. Some young people, however, are
expected pay nothing at all, depending on their earnings, while others will
qualify for subsidies to help finance their coverage.
One bright spot is that market forces are already shaping the HIX model.
“We’re seeing plans offer a variety of innovative benefit packages in a lot of
these exchanges, including a high-value provider network, as well as programs
that promote prevention and wellness, and coordinate care for patients with
complex medical conditions,” Zirkelbach observes. The underlining goals are to
improve care, while also making coverage more affordable, he adds.
Concern has been voiced about a lack of HIX competition in some states, such
as Alabama and Alaska, where certain health insurance carriers dominate those
markets. But Zirkelbach explains that “just because one health plan has large
market share doesn’t mean there’s not competition in the marketplace or there
are not choices for consumers.”
He points to a variety of coverage options from different health plans as
well as multiple policies being available within any given carrier – information
that’s easily accessible at www.healthcare.gov and categorized by Zip code.
Bruce Shutan is a Los Angeles
freelance writer.