There's good news if you live in one of the 36 states where the new Health Insurance Marketplaces will be run by the federal government: premiums will be lower than expected, with most uninsured people able to buy a plan for less than $100 a month. (The drop-down state menu on Healthcare.gov will tell you who's running your state's marketplace.)
When the marketplaces open for business on Oct. 1, residents of those states will, by and large, be able to choose from among many plans (an average of 53 in each state), with full-price premiums running an average of 16 percent less than budget experts projected, according to a report just out from the U.S. Department of Health and Human Services.
Better still, most uninsured people purchasing coverage in the marketplaces will be eligible either for tax credits to bring down the cost of the premiums, or in some of the states, free or nearly free Medicaid coverage.
That’s why HHS projects that nearly 6 in 10 will end up being able to purchase health insurance for less than $100 per person per month if they are willing to go with Bronze plans, which have the highest deductibles and copays.
The tax credits are a new kind that you can use right away to bring down the cost of your coverage. They’re calculated to guarantee that you won’t have to spend more than a specified percentage of your income to purchase the second-cheapest Silver (midprice) plan sold on your state’s exchange.
The exact value of the credit will vary from state to state according to how expensive that Silver plan is. In the 36 states the HHS report covered, the full-price premium for that plan for a family of four ranged from a low of $584 in Tennessee to a high of $1,237 in Wyoming. Once you’ve been told the size of your tax credit, you can use it to buy any plan on the marketplace. (Our free downloadable brochure explains exactly how the credits will work.)
Today is day 3 of our 100-day Health Reform Countdown. We're getting ready for Jan.1, 2014, when the new health law takes full effect. See Day 1: Big changes coming and Day 2: Stay uninsured on purpose? Bad idea! For more, see our full coverage of health insurance and health reform.
The HHS analysis shows just how valuable these tax credits can be to low- and moderate-income households. For instance, a family of four with an income of $50,000 living in Florida will get a tax credit of $507 a month, which will bring down the cost of that Silver plan from $789 to $282—for the entire family. If the family chooses to buy a lower-cost Bronze plan instead, it can apply its $507 credit and end up with a premium of $104 a month.
A 27-year-old earning $25,000 will have the cost of a Silver plan capped at $145 a month. In Alaska, that translates into a credit of $205 a month, which the young adult can turn around and use to buy a Bronze plan for only $48 a month.
And remember, this is for good coverage that takes care of all essential health benefits, such as doctors, hospitals, prescription drugs, outpatient tests and treatments, maternity care, and mental health care. By contrast, many “affordable” health plans sold to individuals today are low in cost only because they have extremely high deductibles ($10,000 or more is common) or don’t cover major benefits such as prescription drugs or outpatient doctor visits.
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