As the nation watched U.S. Sen. Ted Cruz on Tuesday argue for hours to defund Obamacare — even at the cost of shutting down the federal government — the Obama administration released preliminary data showing that premium rates in the health insurance marketplace created by the law will be comparatively low for Texans.
“In just 99 days, millions of Americans will finally have the security and peace of mind that have eluded them for years,” U.S. Health and Human Services Secretary Kathleen Sebelius said on a press call, “as coverage starts to kick in on insurance purchased through the new health insurance marketplace.”
To help people comply with the individual health insurance mandate that takes effect on Jan. 1, the federal government will launch an Orbitz-style online marketplace on Oct. 1 for consumers to apply for tax credits and compare and purchase health plans.
According to the federal report released Tuesday night, Texas will have comparatively low premium rates for health plans offered in the federal marketplace compared with other states. The average monthly rate for a standard plan in the 48 states analyzed in the report was $328, while Texas' was $305. Fourteen states and the District of Columbia will have lower rates on average than Texas for a standard health plan offered in the marketplace.
“Texas has historically had a reasonably competitive insurance market compared to some states,” said Gary Cohen, director of the Center for Consumer Information and Insurance Oversight at the federal Centers for Medicare and Medicaid Services. He explained that in some states one insurance carrier may dominate 75 to 80 percent of the market. “Texas has not had that situation,” he said.
Texans will have on average 54 health plan options available in the federal marketplace. The number of available plans will vary depending on the region. For example, people in Austin will have 76 health plans to choose from on average, while people in the Rio Grande Valley will only have 30 options on average.
Four types of plans will be offered in the marketplace: Bronze, Silver, Gold and Platinum. In general, Bronze plans will have lower monthly premiums but higher out-of-pocket costs, while Platinum plans will have the highest monthly premiums but lower out-of-pocket costs. Premium rates and out-of-pocket costs will vary depending on age, the number of people in the household and the region in which the person lives, among other factors. Ultimately, the prices are based on the estimated cost of health care services over the course of a year.
People who have annual incomes between 100 and 400 percent of the federal poverty line will qualify for sliding-scale tax credits to help them purchase a health plan in the federal marketplace. For an individual, that’s an annual income of $11,490 to $45,960; for a family of four, it's $23,550 to $94,200.
Use this table to see how monthly premium rates will vary in major metropolitan regions of Texas under the federal insurance marketplace, depending on age, income and type of coverage selected.
|Region||27-year-old, $25K annual income||Family of four, $50K annual income|
|Monthly Premium: 2nd-Lowest-Price Silver Plan||Monthly Premium: Lowest-Price Bronze Plan||Monthly Premium: 2nd-Lowest-Price Silver Plan||Monthly Premium: Lowest-Price Bronze Plan|
|Before Tax Credits||After Tax Credits||After Tax Credits||Before Tax Credits||After Tax Credits||After Tax Credits|
In some cases, the lowest-cost Bronze plans may cost less for a family of four or older person with a tax credit than for a young individual with a tax credit. That’s because the tax credits are based on the difference between premium rates for the second-lowest-cost Silver plan and the maximum payment amount based on income. Since premium rates are higher for families and older people, they would receive greater tax credits than young individuals with similar incomes.
"It is a massive wealth transfer from young people to everybody else,” Cruz said during his hours-long speech in the U.S. Senate to block passage of a federal budget that would not defund federal health reform. He argued that premium rates will ultimately be higher because of Obamacare, and that businesses will cut back on employee hours or cut existing health benefits.
This table shows how Texas’ monthly premium rates under the federal insurance marketplace compare to other states included in the report. The finalized premium rates won’t be available until the marketplace launches on Oct. 1. Until then, you can also take an educated guess as to whether you’ll qualify for a tax credit by using this calculator.
|State||Lowest-Price Silver Plan||2nd Lowest-Price Silver Plan||Lowest-Price Bronze Plan|
|District of Columbia||$293||$297||$204|
This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
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This article originally appeared in The Texas Tribune at http://www.texastribune.org/2013/09/24/report-premium-rates-federal-exchange-low-texas/.