The state’s top insurance official Monday released the premiums Montanans will pay for health insurance policies they buy on the new “Obamacare” marketplace in 2014 — and said she is “pleasantly surprised” by the prices.
Whether the premiums are higher or lower than current prices isn’t immediately clear, because most policies on the Internet marketplace as of Oct. 1 have different terms than policies on the market now.
However, the policy premiums don’t appear wildly different than rates for current individual policies in Montana — and next year’s prices also could be offset by generous federal subsidies for individuals, depending on one’s income.
State Auditor Monica Lindeen said the comparable prices are due in part to Montana’s relatively strict insurance laws, which already mandate many basic coverages required by the 2010 Affordable Care Act, known as Obamacare.
Lindeen, a Democrat, also noted that under Obamacare, insurers no longer can deny coverage or charge higher prices for people with serious illnesses or health conditions.
“I’m pleasantly surprised by these prices and pleased that Montanans who have survived cancer and other serious illnesses will no longer be denied health insurance or priced out of the market,” she said. “Not everything about Obamacare is perfect, but these market reforms were a long time coming.”
Still, the prices released Monday show that health insurance remains far from cheap.
For a 25-year-old, the least-expensive policy of those revealed Monday is about $155 a month — and that policy has a nearly $4,000 deductible, meaning you’d pay for most medical costs out of your own pocket up to $4,000, before insurance covers much of anything.
Also, that policy has a 50 percent coinsurance rate, which means you’d still pay half the amount of medical costs covered by insurance.
A 25-year-old who wants a policy with a $500 deductible would pay about $265 a month – although subsidies would offset whatever you pay if your annual income is under $46,000.
For a 55-year-old, the price of a policy ranges from $360 a month to $660 a month, depending on how much coverage you want to buy.
The prices released by Lindeen are for policies being sold on the federal Internet marketplace for Montana, a key component of Obamacare. The policies go on sale Oct. 1 and take effect Jan. 1.
Three companies are offering policies on the marketplace: Blue Cross and Blue Shield of Montana, PacificSource and the Montana Health Co-op, a new nonprofit insurer.
Lindeen released prices for small-group and individual polices, in categories called Bronze, Silver and Gold. Bronze is the least expensive policy and has the least generous coverage; Gold policies are more expensive and have better coverage.
As of next year, federal law requires all citizens to carry health insurance or face a tax penalty.
Anyone can shop for health insurance on the Internet exchange, but it’s targeted at individuals and small businesses that currently have no insurance and don’t have access to large group polices. As many as 200,000 Montanans are currently without health insurance.
Under Obamacare, those earning up to 400 percent of the federal poverty level — about $46,000 for a single person — are eligible for federal subsidies to offset the cost of health insurance they buy.
However, to get the subsidy, you must buy a policy on the Internet marketplace from one of the three companies offering policies on that marketplace.
Todd Lovshin, vice president and Montana regional director for Oregon-based PacificSource, said when people look at the prices, they also should consider subsidy they can get to offset the price of the premium.
“None of these rates include any subsidies that are available to a vast majority of Montanans,” he said.
He also noted that PacificSource has the lower-cost policies in some areas, but is higher in others — and that the same is true for the other companies.
“In the end, the pricing (for health insurance) is finally transparent,” Lovshin said. “Now we can start talking about the services and the value add-ons that we have as a company.”
Frank Cote, director of sales for Blue Cross, said the company has been competing in small-group and individual markets in Montana for years, and will offer an array of “competitively priced products” both on and off the Internet marketplace.
When looking at the rates, it’s also important to keep in mind that the ACA has protections that require insurers to rebate premiums if the prices are above a certain percentage of costs, he added.
Jerry Dworak, CEO for the Montana Health Co-op, said the prices show that the new insurer is competitive with the more-established firms of Blue Cross and PacificSource.
“We’re excited and we’re looking forward to Oct. 1,” he said.