— The White House (@WhiteHouse) September 25, 2013
I hope you’re sitting down. After all the stories about a “train-wreck”, after every Dr Seuss classic read out loud in the Senate, after sticker shock shock and crazy-ass Forbes hit-pieces, we now greet something called reality. The gist of the new report on Obamacare premium prices:
The report, released Wednesday by the Department of Health and Human Services, showed significant variation in the insurance premiums that Americans shopping on the individual market could pay under the president’s health-care overhaul. Across the 48 states for which data were available, the unsubsidized monthly premiums could be as low as $70 for an individual and as high as $1,200 for a moderate plan for a family of four.
The average national premium for an individual policy will be $328 in 2014, before including any of the tax credits that will be available to low- and middle-income Americans to help them purchase coverage.
It gets worse for Republicans. Kaiser Health News notes that many red states will have relatively low premiums:
One of the report’s most striking findings is that states like Texas and Florida, where the law has faced fierce opposition despite high rates of uninsured residents, will see rates at or below the national average.
“There is no clear political pattern to these premiums,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a nonpartisan research organization. …“Some conservative, anti-Obamacare states have lower-than-average premiums, and some pro-Obamacare states have higher-than-average premiums.”
Yglesias compares these numbers to the CBO’s projections:
HHS reports that in about 94 percent of cases the CBO overestimated how high premiums would be.
Specific premiums are going to vary quite widely from state to state and according to your age and the size of your family. But nationwide health care spending has grown more slowly than people had expected over the past couple of years, and in most states insurance companies have offered fairly aggressive bids to participate in the exchanges. Obviously this could all change 18 months from now when people are actually in the plans, but for now it looks like Obamacare will be cheaper for families and taxpayers than was thought at the time Congress voted on it.
Cohn provides more details on the report:
The HHS report spotlighted only silver and bronze plans, which are the ones people are most likely to buy. Based on a quick skim, the most expensive unsubsidized policies I saw were in Jackson, Mississippi, and Cheyenne, Wyoming. In those places, a family of four too wealthy for subsidies will pay more than $1200 a month for the second-cheapest silver plan. The least expensive were in Nashville, Tennessee, where the full “sticker price” of the second cheapest silver plan will be $559 a month.
There’s a lot less variation for families whose incomes qualify them for those subsidies. And that’s very much by design: The law effectively tries to dictate what people will pay for the second-cheapest silver plans, no matter where they live. For a family of four with income of $50,000, the cost for such a plan in almost every city and state is $282 a month. But because of the way the subsidies work, applying those subsidies to even cheaper plans can reduce premiums even more—and at varying levels, depending on location. In Philadelphia, Pennsylvania, that family of four making $50,000 a year could get the cheapest bronze plan for $96 a month. A similar family living in the Virgina suburbs of Washington, D.C., could get one for nothing.
Drum weighs in:
After tax credits, that family of four in Texas will pay $3,384 per year for the second lowest-cost silver plan. According to the Kaiser Family Foundation, the average family with employer health coverage pays $4,565 per year in contributions. Those aren’t directly comparable, but they’re close. What it means is that although Obamacare is hardly free, it does allow individuals to buy coverage for roughly the same amount they’d have to pay with an employer plan. No one is shut out of the market any longer.