Ohio insurance regulators released the health insurance rates for individuals & families policies on the exchange in 2014. The rates reflect a 41% increase in average premiums when compared to 2013 rates ($332.58 vs. $236). This increase in avg. premiums was not unexpected, and is actually lower than what the Ohio Dept of Insurance had previously predicted. Lt. Gov Mary Taylor previously made the statement that avg individual health insurance premiums would come in around $420 “…representing an avg increase of 88% compared to 2013” and that “consumers will have much fewer choices and pay higher premiums in 2014“.
Rate Increase Not as Bad For Ohio Consumers As It Might Seem
While the avg premiums will indeed rise by 41% year over year, there are a couple reasons why this news is not quite as bad is it might seem on the surface.
1) The quoted 41% rate increase only considers health insurance premiums, not total out of pocket costs. This does not provide a great apples-to-apples comparison. Many of the individual health plans in force today provide catastrophic coverage only with deductibles of $10,000. In addition, many existing policies do not require 10 essential health benefits that are required in the new exchange environment. So while premiums will indeed be higher on avg., the benefits are on avg. much richer as well, which may yield out of pocket cost savings down the road.
2) The quoted 41% avg rate increase on policies does not include income based Federal subsidies. An estimated 80-90% of Americans shopping for coverage via the exchange will be eligible for income based subsidies. Those that make less than 400% of the federal poverty level will be eligible for some level of subsidy, which will offset the monthly premiums. In an example provided by the Cleveland Plain Dealer, a 30 yr old with a household income of $30,000 will pay premiums of $209/mo., however the federal subsidy will cover about $76 of that, reducing the monthly premium that the customer is responsible for to $133/mo .
The 41% avg. rate increase is a blended average of all Ohioans purchasing policies. Some cohorts will pay significantly more, while other groups might actually pay less than what they are paying today.
The Winners & Losers
Some people will benefit tremendously from the new healthcare rules, and some will suffer. Below is a list of general situations where shoppers will likely experience rate relief of pay significantly more than what they are accustomed.
1) Older individuals
2) Individuals & Families who are eligible for income based subsidies
3) Individuals who have pre-existing conditions
1) Younger individuals (generally < 40 yrs old)
2) Individuals & Families not eligible foe subisidies
3) Healthy individuals
Ohio Health Insurers
Twelve carriers will offer policies on the Ohio exchange, including: Anthem, Aultcare, Buckeye Community Heath Plan, Caresource, Coventry, Healthspan, Humana, Kaiser Permanente, Medical Health Insuring Corp. of Ohio, Molina, Paramount, and Summacare. More information will be provided in he coming months about prevailing health insurance rates by carrier. Stop back for updates.
Written by Jeff Levy
Tags: ACA, anthem, exchange, health insurance rates, obamacare, ohio health insurance