On Monday, the Arkansas Insurance Department released the plans that will be available on the Arkansas Health Insurance Marketplace, the new regulated marketplace where consumers will buy private health insurance, with enrollment beginning next month. The prices came in lower than expected, though some people who currently buy insurance on the private market will see higher premiums than the cheapest plans they can find today.
There will be 71 plans offered, divided into levels based on coverage and price — bronze, silver, gold — with gold being the most expensive and offering the most coverage. Bronze plans are cheaper but could lead to more out-of-pocket costs when consumers use medical services. Specific details of the plans, such as deductibles and provider networks, had not been released as the Times goes to press, but should be available from the Insurance Department this week.
Premium prices depend on age and region of the state (see map) so there is a lot of variance. Here are just a couple of examples:
• For a 25-year-old non-smoker in Central Arkansas, a bronze plan is available for a monthly premium of $182, a silver for $231, gold for $264. We'll call him Gus, and we'll return to him in a minute.
• For a family of four in Central Arkansas — mom and dad are 40-year-old non-smokers and they have two kids — a bronze plan for the whole family is available for a monthly premium of $693, silver for $879, gold for $1,007. We'll call this family the Joneses.
Those rates are the sticker prices, but many consumers will qualify for subsidies and end up paying less (more on that below). You can get a full look at all the rates online at arktimes.com/rates.
The Arkansas Health Insurance Marketplace was created as part of the national healthcare law and as a handy shorthand, these plans are often called Obamacare plans. Here's what that means: Four private insurance companies, Arkansas Blue Cross and Blue Shield; the national Blue Cross and Blue Shield, QualChoice and Centene, are offering plans on the marketplace. Because of Obamacare, all of these plans must cover 10 essential health benefits (stuff like maternity care and prescription drugs), and insurance companies are no longer allowed to deny coverage or charge higher prices based on pre-existing health conditions. They're also no longer allowed to charge higher prices for women — all of the rates released on Monday apply to either gender.
These plans are for people buying their own insurance on the private market, either directly from an insurance company or through a broker. This doesn't impact the overwhelming majority of people — 80 percent of Americans — who get insurance either from an employer or from a big public program like Medicaid or Medicare. There are three major takeaways from the plan prices:
1. The premiums appear to be in line with — or lower than — the actuarial projections that the Department of Human Services used to predict the cost of the "private option," the state's unique plan for Medicaid expansion. DHS has not yet begun an analysis comparing the projections with the premiums; the comparison is complicated because of the variance between ages and regions. If the premiums are lower than the actuarial predictions, then the total gross cost of expanding Medicaid via the "private option" would be significantly less than projected during the legislative debate. For the state of Arkansas, that would mean the total net projected savings to the state's bottom line would be even higher than the current projection of almost $670 million in savings over 10 years. For the federal government, it would mean a lower net cost.
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