Ohio insurance regulators Thursday released rates for health insurance to be sold on the new state marketplace and said premiums for individuals will rise an average of 41 percent compared with 2013 rates.
That average brought immediate condemnation from critics of the Affordable Care Act, with U.S. House Speaker John Boehner, a southwest Ohio Republican, calling it “irrefutable evidence” that the law known as Obamacare is driving up costs and hurting the economy.
But the average 2014 premium of $332.58 a month for individuals, unveiled by Ohio Lt. Gov. Mary Taylor, masks the fact that for many individuals, premiums and out-of-pocket medical expenses will go down.
The marketplace, or “exchange,” will allow people who do not get coverage through their employers or a public program — a relatively small portion of the population — to purchase health insurance.
Eighty to 90 percent of Americans using the exchange will be eligible for income-based federal subsidies to reduce or eliminate their costs, according to the Congressional Budget Office. Those who make less than four times the federal poverty level — $45,960 a year for a single person and $94,200 for a family of four– will be eligible. A 30 year-old that makes $30,000, for example, will be expected to pay only $2,512 in premiums per year. That means he or she will pay $209 a month, and the federal government will cover about $76.
The previous state average premium, which Taylor said was $236 this year, used to calculate the 41 percent increase is “artificially low,” said Larry Levitt, Senior Vice President of the nonpartisan Kaiser Family Foundation. The 2013 premium is based on an array of policies, many of which will no longer be available under the Affordable Care Act, he said. Some, for example, only offered catastrophic coverage and required deductibles of $10,000 and more.
By contrast, plans under the Affordable Care Act must include 10 essential health benefits: preventive and wellness care; maternity and newborn care; mental health and substance abuse treatment; prescription drugs; pediatric dental and eye care; rehabilitative services and devices; emergency services, hospitalization and laboratory work.
While Levitt acknowledged that setting higher standards for coverage increases premiums, he said with more comprehensive coverage, out-of-pocket costs will go down.
Secondly, Levitt said that the 2013 premium is based on a much healthier pool of people than the average population, as people with pre-existing conditions can currently be denied coverage. The Affordable Care Act forbids insurers from discriminating against people with pre-existing conditions, which increases the 2014 premium.
By spreading the costs and the risks among thousands of enrollees, and by offering subsidies to make insurance affordable for many, the exchanges will make it possible for people with pre-existing conditions or illnesses to get coverage for the first time, said Cathy Levine, executive director of the Universal Health Care Action Network of Ohio.
“It’s too bad for Ohio consumers that Mary Taylor has concealed as bad news what is actually great news – that the federal exchange will increase access to affordable health insurance to nearly 1 million people who are currently shut out of the insurance market,” Levine said.
The one fact most agreed upon: Premiums are likely to go up for young, healthy individuals who buy their own health coverage, but that’s before considering the subsidies to offset their costs. Older, pre-Medicare individuals will probably see lower prices.
But for their money, both groups, as well as those in between, will see a richer array of benefits, which Taylor acknowledged.
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