Jim Bourg/Reuters /Landov
Department of Health and Human Services
Secretary Kathleen Sebelius says "six in 10 Americans who currently lack
insurance will be able to find coverage that costs less than $100 a
month" in health insurance exchanges set to open next week. Here,
Sebelius is shown testifying on Capitol Hill on June 4.
Premiums in the health insurance exchanges set to open next week
will be lower than anticipated, the Obama administration announced
According to a released by the Department of Health
and Human Services, "premiums nationwide will ... be around 16 percent
lower than originally expected," and 95 percent of uninsured people live
in a state with average premiums that are lower than expected.
But while the premium ""
that many predicted may not be materializing, there may be other things
about the new health plans that consumers may not like that much.
now, the only premium information that's been released publicly about
the Obamacare exchanges has been for states running their own, and in
many, the rates have been .
Now, however, the administration
has released information for the 36 states where the federal government
will operate the new exchanges in full or in part.
"Six in 10
Americans who currently lack insurance will be able to find coverage
that costs less than $100 a month," HHS Secretary Kathleen Sebelius told
reporters in a conference call.
And in some cases, available
tax credits can make health insurance really inexpensive. For example,
said Sebelius, "Dallas families earning $50,000 a year will be able to
buy quality coverage for as little as $26 a month."
One reason for the lower-than-expected premiums is higher-than-expected participation by insurance companies.
All year, it seemed that many ,
at least for this first year of the program. A few states and some
counties within states will only have spotty competition. But
administration officials say people in the 36 states where the feds are
in charge will have an average of 56 different plans to choose from,
offered by multiple insurance companies.
And competition is key to those lower rates.
of the country that have a number of insurers participating and
competing for business, are coming in with lower premiums," said Larry
Levitt, a senior vice president at the , who's been studying the development of the exchanges. "So the market appears to be working."
it seems that another reason that the rates are lower — at least some
of them — is that insurance companies have limited the size of their
doctor and hospital networks in some of the cheaper plans.
lowest cost plans are coming in a lot lower than people were
predicting, because the networks are coming in with a lot fewer doctors
and hospitals than people were predicting," said Robert Laszewski. He's
an and longtime observer of the health care system.
Because the law requires all insurers to basically offer , varying the size of the network was about the only tool they had left to try to create a less expensive plan.
example in California, the lowest cost Silver plan is one that has only
about half the doctors and hospitals that particular health plan has in
their standard employer network," Laszewski said.
Silver being the
among bronze, silver, gold and platinum. Laszewski says that for people
who are currently uninsured, these more limited network plans will
probably be just fine. But for people who have been buying their own
insurance, or if they've had employer-provided insurance, they're likely
used to having a freer choice of doctors and hospitals. And they're
going to find that comes with a price.
"You're going to have to pay $100, $150 a month more than that to be able to get access to those kinds of networks," he said.
officials, however, dispute the idea that consumers will rebel against
the plans with the narrower networks. Gary Cohen, the official at HHS
who is , told reporters that state insurance officials have a long
history of regulating insurers — making sure that their networks have
enough doctors and hospitals to provide adequate care.
certainly don't want to get a bunch of phone calls from people who have
health coverage but can't get health care," he said.
data released by the administration likely won't settle the premium
fight once and for all. The numbers are all averages. The premium
individual consumers will pay will depend on where they live, how old
they are, number of family members, household income, and other