WASHINGTON – Arizona residents will be offered health-insurance plans with some of the lowest premiums in the country when federal insurance marketplaces begin open enrollment Tuesday under Obamacare, the government said Wednesday.
The report by the Department of Health and Human Services said Arizona’s premiums were as low as fourth-lowest, and no worse than 12th-cheapest, when different policy levels were compared among 47 states and the District of Columbia.
Eleven states and the District will run their own plans, while 36 states – including Arizona – will have marketplaces managed by the federal government.
In Arizona, the rates ranged from an apparent low of $120 a month for a single 27-year-old on a basic plan to as much as $705 for a 64-year-old with a high-end coverage plan, according to the report.
Those are averages for those groups in Arizona – actual rates will vary based on where a consumer lives, their income and age, and rates may be revised before the marketplaces open Oct. 1, the report said.
No matter their age or where they live, however, consumers in Arizona will be able to choose from more than 75 plans and at least six insurers. The average for the 36 federally managed states was 53 plans and eight insurers, though Alabama and West Virginia will have just one or two insurers and a handful of plans.
“In those states that have lots of insurers competing with each other and are offering many different choices for consumers, those rates tend to be lower,” said Dr. Dan Derksen, director of the University of Arizona’s Center for Rural Health. “That’s what the market is intended to do.”
Derksen said the rates might have surprised some people, but he called the report “welcome news” and said the rates seemed affordable for the uninsured.
But critics charged that while states like Arizona appeared to offer more options and low prices, the federal marketplaces will actually reduce choice and increase costs.
“Cost did not go down for consumers,” said Christina Corieri, health care policy analyst for the Goldwater Institute. “The only thing that went down was choice.”
With a little online shopping, Corieri said she was able to find several insurance plans at eHealthInsurance.com that were cheaper than the report’s quoted $120 monthly premium for an Arizona 27-year-old on the lowest-cost bronze-level plan. And that was even with the tax credit that a consumer on the federal marketplace would get.
“For Arizona at least, specifically, you can get cheaper plans today than you can on the exchange, even with a tax credit,” she said. “And it’s at no cost to the taxpayer.”
Corieri said the plan she found appeared to have coverage similar to the marketplace policy, but she could not be sure of an “apples to apples” comparison on things like provider networks because specific plan details were not available Wednesday.
But she said she thinks plans on the federal marketplace are likely to be more restrictive, not less, citing recent reports that insurance providers had narrowed the networks on plans offered through California’s state-run healthcare marketplace.
“It’s a bad deal for the taxpayer, it’s a bad deal for the working poor,” she said of Obamacare overall.
The Centers for Medicare & Medicaid Services (CMS) administrator for the region that includes Arizona said federal marketplace prices that are higher than those Corieri said she found could reflect a higher standard of coverage for the marketplace policies. Or, said David Sayen, it could reflect a decision by insurance companies to discourage consumers from buying plans on the government market.
But he noted that consumers cannot get the federal tax credits for health insurance unless they go through the marketplaces.
“If you can come out cheaper with a plan you like better on the outside, that’s great,” he said. “There’s always different prices in different places, but again, this (federal marketplace) is going to provide, I think, the gold standard of prices.”
It will also bring price transparency and competition to insurance costs, Sayen said, in the way Medicare Part D brought did for drug prices.
“I salute the eHealthInsurance guys,” he said. “We didn’t invent this, but we bring a regulatory structure to it that no one else does.”
Sayen said that while premiums were “more favorable than I expected,” many details about the plans will not be available until Oct. 1. He is encouraging consumers to take their time during the open-enrollment period, which lasts until March 31, 2014, and “kick the tires” before buying a plan.
“You’ve got to see what they actually have before you know if it’s a bargain,” he said.
Corieri is already convinced it’s no bargain.
“HHS is selling this like, ‘It’s great, we’re going to give this away like Christmas candy right after Christmas,’” she said. “But I suspect it’s really going to turn to coal in people’s stockings when they see that their bill is going up.”
A Department of Health and Human Services report of expected health insurance premiums when federal insurance marketplaces open Oct. 1 said Arizona costs were relatively low. But premiums can vary based on several factors:
– Family size
– Coverage level, from bronze (lowest) through silver, gold and platinum (highest)
– Potential for tax credits to offset premium
Sample premiums for Arizona below are based on weighted averages from the entire state:
27-year-old, before tax credits.
– Lowest gold: $187
– Lowest silver: $164
– Lowest bronze: $141
27-year-old with an income of $25,000.
– Second-lowest silver: (before tax credit): $166
– Second-lowest silver: (after tax credit): $145
– Lowest bronze: (after tax credit): $120
Family of four with an income of $50,000.
– Second-lowest silver: (before tax credit): $600
– Second-lowest silver: (after tax credit): $282
– Lowest bronze: (after tax credit): $192
SOURCE: Health Insurance Marketplace Premiums for 2014