Published May 17, 2013
In a boost for President Barack Obama's healthcare reform law, two states in the Northwest said on Friday that insurance companies submitted applications to sell policies on the states' health insurance exchanges at rates well below what some insurance executives had predicted.
The insurance marketplaces are a key element of the reform law, which is due to take full effect in 2014. A core principle of these exchanges is that competition, along with government subsidies and other measures, will keep rates affordable.
The sweeping reform known as Obamacare seeks to extend health insurance to many of the 49 million Americans without it, and alter how care is delivered so as to curb what has been an inexorable rise in healthcare spending. Congressional Republicans who oppose the law had warned that high premiums would sink Obamacare as the uninsured would not be able to afford coverage even with federal subsidies.
As of Thursday, nine insurers had notified the Washington Healthplanfinder, the state's online marketplace, of their intent to offer 57 plans -- with different deductibles, premiums and coverage options to individuals and families.
The state will evaluate the plans to ensure they offer what the reform law calls "essential health benefits," such as coverage for preventive care, and meet other requirements.
"We were pleasantly surprised at how great the rates look," said Washington exchange spokesman Michael Marchand. "After subsidies many people will pay even less, and they'll get more benefits" than are offered in many current policies.
Companies including Bridgespan, Premera Blue Cross and Group Health Cooperative submitted proposals to sell health insurance on Washington's health insurance exchange.
Middle-tier policies would have monthly premiums of $239 under Bridgespan's proposal, $228 for one from Premera Blue Cross and $210 for one from Group Health Cooperative for a 21-year-old. Policies would cost $305, $292 an $268, respectively, for a 40-year-old; and $648, $620 and $569 for a 60-year-old.
The actual amount a person would pay would be reduced by subsidies Obamacare offers to people whose income falls below a level set at four times the federal poverty line.
Premera and Group Health are among the carriers that currently dominate Washington's health insurance market.
MIXED COMPETITIVE BAG
Cover Oregon, that state's insurance exchange, attracted plans from 12 insurers, said spokeswoman Lisa Morawski, including FamilyCare Health Plans, Health Net Health Plan of Oregon, Kaiser Foundation Health Plan of the Northwest, LifeWise Health Plan of Oregon and Regence BlueCross BlueShield of Oregon.
Proposed premiums for a 40-year-old non-smoker range from $169 to $422 per month for plans with different levels of coverage, "much more reasonable than some people had been predicting," said Gary Claxton, a vice president of the Kaiser Family Foundation.
Claxton said some had forecast premiums double or triple what Oregon and Washington have announced.
Oregon and Washington both appear to be benefiting from heavy competition, though both states had that even before Obamacare. Whether a state has defaulted to a federally run insurance exchange or is running its own, the competitive landscape is starting to look somewhat similar: insurers are sticking to the markets they know.
In small markets like Maine, Alaska and Vermont, only two insurers have proposed to sell policies on the exchange. States with large insurance markets now - like Virginia and Maryland - are attracting many insurers.
Rates will be different in each state and affected by changes in the risk pool as more people are insured, the American Academy of Actuaries said in a report this week.
Insurance executives have warned about rate shock on the exchanges. Health and Human Services Secretary Kathleen Sebelius has said that some groups, such as young men, will likely pay more in 2014, at least before federal subsidies kick in.
Earlier this year Vermont announced rates higher than in Washington or Oregon. Monthly premiums for the lowest level of coverage range from $350 for a single person to $983 per family.
Some states are still waiting for insurer applications and making changes to their model, according to Avalere State Reform Insights, a monthly report that looks at health reform developments. Colorado, for instance, just issued a formal request to insurers for plans for its exchange.
(Editing by Ben Berkowitz, Mary Milliken and Andrew Hay)