An independent consultant hired by that state’s insurance exchange board said Tuesday that when the dust settles the monthly premium rates offered by five insurance carriers participating in the exchange will increase — both in the individual and small group market.
Julia Lambert, president of Wakely Consulting Group, told the Access Health CT Board of Directors, that individual rates in 2014 will be less than small group rates, but rates in both the individual and small group markets will be going.
However, Lambert said that doesn’t necessarily mean everyone will be paying more. The individual rate increases in many instances will be offset by federal subsidies, which under the Affordable Care Act also called Obamacare, are available to individuals and families who make up to 400 percent of the federal poverty level.
That means for a family of four living in Fairfield county with a 45-year-old father, 43-year-old mother, and two teenage children with an annual household income of about $94,200, they would be paying anywhere from $530 to $724 in the 2013 individual market. But under the exchange they will see their rates go up to $943, an increase on average of about 55.8 percent. That’s all before they receive a subsidy from the federal government for purchasing their plan through the exchange.
Lambert estimated there are about 67,900 uninsured individuals who fall into that category. The bulk of the uninsured will be under 139 percent of the federal poverty level and will qualify for Medicaid. The second largest segment, or about 95,400 of the uninsured in Connecticut, fall between 139 percent and 250 percent of the federal poverty level.
Many of the individuals who fall around 250 percent of the federal poverty level will see their monthly premiums drop on average by about 93.3 percent if they are the same family of four with two teenage children making about $58,875 a year. Currently, that family of four would be paying on average about $605 per month. If they chose the HealthyCT Bronze plan, they would be paying about $40 per month after the federal subsidy is applied.
Lambert said it’s important for individuals and families to know their annual income and the amount of subsidy they will receive before heading into the marketplace in search of an insurance plan. She said it’s also important to keep in mind that the benefits that will be covered by the plans under the Affordable Care Act, such as pharmacy or maternity, may be richer than those currently offered in the marketplace.
Click here to read more about what types of benefits will be covered by plans on the exchange.
Most of the five carriers that have submitted plans to be sold on the exchange reduced their rates after conversations with the Insurance Department—which will have the final say on rates.
Click here for Lambert’s full report to the board.
In general, younger individuals will see the biggest increases in premiums and older individuals will see the lowest increases in premiums.
A healthy 21-year-old male who makes about $45,960 a year wouldn’t receive a federal subsidy and would see an increase of nearly 120 percent in his premium, according to the analysis done by Lambert.
On the small group side, premiums are higher than they are in the individual marketplace, Lambert said.
There will be 12 small group plans offered on the exchange by three insurance carriers. Last week, ConnectiCare Benefits dropped its plan to participate in that market. Lambert warned that all but one company participating in the exchange re-filed their rates with the Insurance Department after Tuesday’s report was finalized, so some of the numbers may be slightly off.
HealthyCT, the only nonprofit, consumer-operated and oriented plan participating in the exchange, announced last week that it lowered its average monthly premiums by about 36 percent in the individual market, and 9 percent in the small group market. Those reductions were not reflected in Lambert’s report to the board Tuesday.
“The rates are not yet final,” Lambert warned. “Our report is premature, but sort of a progress report.”
She said the monthly average premiums are “all over the board depending on who you are and what plan you choose.” The four insurance carriers in the individual market are offering plans at three different tiers, which are being referred to as bronze, silver, and gold. The more expensive plans fall under the gold category and provide more benefits to individuals. There are no platinum plans offered in the individual market on or off the exchange by the four carriers.
Geography also makes a difference. Litchfield County has the lowest average premiums in the small group market and Hartford County has the lowest average premium in the individual market. Fairfield County has the highest average premiums in the individual market. Under the ACA, carriers are no longer allowed to rate their plans based on gender, which means women in their 30s for the first time may be paying less than a 21-year-old male in 2014.
State Healthcare Advocate Victoria Veltri said what she doesn’t know from Lambert’s analysis how robust the network of doctors will be in a given plan. While the network may vary depending on the plan, knowing that your doctor is in the network also will be an important factor when choosing a plan. Lambert said that wasn’t part of the calculations she was asked to make.
“A detailed what’s the market impact of the ACA” on rates “was not within the scope of this project,” Lambert said.
The state Insurance Department has until Aug. 31 to finish analyzing the rates submitted by the carriers and assign a final monthly premium to each of the various plans. There are 24 plans on the individual market in the exchange and 12 small group plans in the exchange.
“I think what we saw from the report today is good news,” Access Health CT CEO Kevin Counihan said. “At the same time it underscored the complexity for average citizens and small businesses to try and make sense of the impact of all these changes.”