Sunday, September 22, 2013

The true cost of insurance in the Obamacare exchanges


There is a lot of confusion and misinformation about how much it will cost eligible people to purchase health insurance in the Obamacare Exchanges.  There shouldn’t be.  Obamacare sets a maximum you can be charged for various levels of coverage and provides subsidies to make up the difference.  The Kaiser Family Foundation has provided an easy-to-use Subsidy Calculator that will show you the maximum you would pay given your income, etc. for different levels of coverage.  I ran some different scenarios through the calculator. 
NOTE: The figures in the table below are MAXIMUM amounts you would pay.  Most people in most states are likely to pay less.

The chart below shows the maximum monthly premium for a family of 4—2 adults who do not use tobacco products and 2 children under 21—after subsidies for various family incomes for two levels of coverage—the Bronze Plan which covers 60% of medical costs (you pay 40%) and the Silver Plan that covers 70% of medical costs (you pay 30%).  For example, if your family income is $35,000 per year or less, the Bronze Plan after subsidies will not cost you anything.  It will be FREE.  You’ll will be able to purchase the Silver Plan for $114 per month or less.  If your family income is $51,017 (the medium family income in 2013), then a Bronze Plan will cost you $151.83 per month and the Silver will cost you $192.58 per month after subsidies. 
NOTE:  As I said, these are maximum monthly premiums you can be charged.  Your actual premium might be less depending upon the state you live in, how many people enroll in the exchanges, the ages of your family members, and how many insurance companies decide to sell insurance on the exchanges.  It cannot be more.  Also, if your family income is less than $32,430 per year , you may be eligible for Medicaid if your state has decided to expand Medicaid coverage.  If your state has decided not to expand Medicaid and you can’t get insurance through your employer, you can purchase insurance on the exchange but you will not get a subsidy—you will pay the full premium.  If you are under 30, you will be able to purchase a cheap catastrophic plan, but you will have to pay the full premium.
For comparison purposes note that the average worker whose employer offered health insurance paid $4,565 per year ($380.08 per month) for family coverage or about 28% of the total premium cost of $16,351 year ($1,362.58 per month).  Out-of-pocket costs for a family enrolled in one of the Temporary Pre-Existing Condition Plans set up by Obamacare to provide coverage for people with pre-existing conditions who had been without coverage for six months could range as high as $11,900 per year ($991.67 per month.)

ANNUAL INCOME
MAXIMUM MONTHLY PREMIUM BRONZE PLAN
(Covers 60% of medical costs)
MAXIMUM MONTHLY PREMIUM SILVER PLAN
(Covers 70% of medical cost)
$32,430
$0.00
$88.58
$35,000
$0.00
$114.42
$40,000
$23.00
$163.75
$45,000
$80.08
$220.83
$50,000
$139.67
$280.42
$51,017
$151.83
$192.58
$55,000
$201.75
$342.58
$60,000
$268.67
$409.42
$65,000
$336.08
$476.92
$70,000
$408.75
$549.50
$75,000
$453.00
$593.75
$80,000
$492.58
$633.33
$85,000
$532.17
$672.92
$90,000
$571.75
$712.50
$94,200
$605.00
$745.75

You can get further information about Obamacare costs at these links: 
Calculated using the Kaiser Foundation Susidy Calculator located here:  http://kff.org/interactive/subsidy-calculator/
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/06/finally-the-actual-prices-for-insurance-under-obamacare/

Kaiser 2013 Health Benefits Survey covers cost and coverage in employer-based plans.
http://kff.org/private-insurance/report/2013-employer-health-benefits/

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