por Loren Bonner
, DOTmed News Online Editor | September 06, 2013
Health insurance exchanges, which are part of the Affordable Care Act, go into effect in less than one month and stakeholders have been scrambling to prepare.
One of the key questions that remains is what rates consumers can expect. The state-based health insurance exchanges were set up in the new law to give consumers the opportunity to shop around for affordable, comprehensive insurance coverage, since everyone will be required to carry insurance starting in 2014.
Avalere Health, a consulting firm, analyzed the 2014 exchange rates for a handful of states where information was available. Rates varied by age but overall they were priced at competitive rates.
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Avalere analyzed public rate filings released by California, Connecticut, Washington D.C., Indiana, Maryland, New York, Ohio, Rhode Island, South Dakota, Vermont, Virginia, and Washington. They found that minimum premiums for a 40-year old, non-smoker averaged across states is $261 per month for a Silver exchange plan. Premiums for the lowest cost Silver products available in each state range from $197 per month in Maryland to $383 in Vermont.
"Regardless of whether the state or federal government is operating the exchange, we are seeing competitive Silver premiums in the low $200 to $300 range in most markets," said Caroline Pearson, vice president of Avalere, in a statement.
In terms of age, Avalere found that Silver premiums for a 60-year old, non-smoker are $615 compared to $327 for a 40-year old, and $271 for a 21-year old.
For the most part, experts have speculated that health exchange premiums are unlikely to cause "rate shock." According to a recent study
from the Robert Wood Johnson Foundation, enrollees in the new exchanges will likely be young and relatively healthy, thereby keeping rates lower than if it were priced for a pool of unhealthy individuals.
But some warn that the initial rates could look very different next year.
"I tell people don't get too excited until you see what the next year's premiums are going to be because there is enormous uncertainty," Gail Wilensky, a health economist, told DOTmed News.
"I think the reason some of the big private companies have very selectively participated in the exchanges...is because they are very concerned that there will be substantial adverse selection this first year."
She said it's unclear how many unhealthy people will show up the first year — those first in line could very well be people who were unable to enroll in the high risk pools or those who have been denied insurance in the past because of a pre-existing condition.
"So you'll know if after the first year it looks like the premiums were about right, then it's real. But until you actually have real live experience it's a crapshoot for everyone involved," said Wilensky.
An estimated 7 million Americans are expected to sign up for health insurance through the exchanges. Consumers who are not eligible for Medicaid or who are not covered by their employers will likely find coverage through their state-based exchange. Furthermore, an estimated 80 percent of exchange enrollees will qualify for premium subsidies that will further reduce the cost of coverage.