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Studies Examine Costs for Mainers in New Insurance Marketplace
09/06/2013   Reported By: Patty B. Wight

In just four weeks, individuals and small businesses in Maine will be able to purchase insurance through a new online marketplace created under the federal Affordable Care Act. Two new studies offer estimates of the average monthly insurance premium that consumers might expect to pay. As Patty Wight reports, it might actually make more sense for some people to choose higher premium plans, in order to tap higher subsidies from the federal government.

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In just four weeks, individuals and small businesses in Maine will be able to purchase insurance through a new online marketplace created under the federal Affordable Care Act. Two new studies offer estimates of the average monthly insurance premium that consumers might expect to pay. As Patty Wight reports, it might actually make more sense for some people to choose higher premium plans, in order to tap higher subsidies from the federal government.

One study is from the Kaiser Family Foundation, which looked at premium prices on the online marketplace for the largest cities in 17 states, including Portland, Maine. Kaiser policy analyst Cynthia Cox says there is a clear conclusion: "In most of these states, the premiums were lower than what had been projected."

The people who will use the online marketplace are those who don't have insurance through their employer or don't have Medicare. That means about 10 percent of Mainers will choose from a menu of four plans with varying levels of coverage: Catastrophic, Bronze, Silver, and Gold.

As for cost, Cox says if you're a 40 year old in Portland shopping for a Silver plan, "The range was in the lower two-hundreds to $400 dollars a month."

Maine's premiums fall in the middle of the spectrum when compared with the other states evaluated. But the premiums will also vary within Maine, depending on where you live, says Consumers for Affordable Health Care Policy Director Mitchell Stein.

"People in the northern and western parts of the state are going to pay more in terms of the raw premium numbers than people in Portland and the southern part of the state," Stein says.

But the raw premium numbers don't take into account the federal tax credits that are aimed at lowering monthly insurance bills. If you purchase insurance through the marketplace and earn between 100 percent and 400 percent of the poverty level, you'll get a tax subsidy that caps the maximum percent of your income you spend on premiums at 9.5 percent.

"And so in the more expensive regions, the subsidy will end up being larger," Stein says, "so that will help to soften the blow of the differences across the different regions of our state."

Washington, D.C.-based health care consulting firm Avalere also evaluated premium numbers in 11 states. Vice President Caroline Pearson says savvy consumers buying through the marketplace will consider plans that don't necessarily have the lowest premium. Those who earn less than 250 percent of the poverty level, for example, could qualify for additional subsidies if they select a pricier plan.

"So the government is actually going to help reduce the cost that they're paying for all of their medical visits and prescription drugs," Pearson says. "And for those people, those subsidies are really tied to the Silver level, so they're really going to want to make sure that they do buy a Silver plan because, even though the premiums might be a little higher, the generosity of benefits will be much greater than what they'd get in a Bronze plan."

Pearson says that although Avalere's study examined only 11 states, the results are likely to reflect the costs consumers can expect around the country.

"I think what we're seeing is that the exchanges are really working, even in states where there are only about three carriers," Pearson says. "We're seeing the health plans really competing to put low-cost products on the market in order to try to win enrollment."

The ultimate test will come Oct. 1, when the online marketplace officially opens, and individuals and small groups start buying insurance.



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