Friday, August 22, 2014

Millions of Americans are paying less for Obamacare than cable

Getty Images News

Subsidized shoppers on HealthCare.gov are paying, on average, $82 monthly premiums for health plans, new data from the US Department of Health and Human Services shows.

The report, published Wednesday, is the most in-depth look available so far at the prices that federal marketplace shoppers will pay for private health coverage. It shows the vast majority of shoppers will use federal subsidies to pay for insurance, significantly reducing their monthly price tag.

Senior HHS officials, in a conference call with reporters Tuesday, emphasized the report's findings to show that Obamacare is keeping prices low for shoppers and bringing new competition to the insurance markets. To the Obama administration, the report is more evidence the health-care law is working as intended.

Most subsidized shoppers will receive hundreds in tax credits each month

About 87 percent of subsidized HealthCare.gov shoppers had at least part of their premium covered with tax credits, which are available to low and middle-income Americans. How much shoppers paid depended largely on how generous of an insurance plan they selected.

After accounting for subsidies, enrollees paid an average of $69 per month for the least-generous bronze plan to an average of $220 per month for the most-generous platinum plan.

Average_monthly_premium

The government is paying, on average, a much larger share of the tab: about $264 for each subsidized shopper's monthly premium. The Congressional Budget Office has estimated that, over the course of this year, the federal government will spend a total of $20 billion on insurance subsidies like these.

Average_monthly_tax_credit_obamacare

Most subsidized shoppers are paying $100 or less each month for Obamacare plans

As a result of the subsidies, about two-thirds of HealthCare.gov shoppers who qualified for tax credits are paying $100 or less each month for health insurance.

Monthly_premium

Most Obamacare-eligible Americans live in areas with some level of competition in the marketplaces

About 96 percent of Americans eligible to purchase Obamacare were in areas with two or more issuers, meaning there was at least some level of competition in the marketplace.

Obamacare_competition

Under Obamacare, this kind of competition is meant to drive down health insurance costs. The idea: If there are more insurers in the marketplace, that should encourage health plan issuers to drive down costs — or at least expand the services they cover — so they stand out among the competition.

HHS argues that this is what's actually happening. Its report shows that the addition of one issuer in the marketplace on average correlates with a 4 percent reduction in the cost of the second-cheapest silver plan.

Whether that competition will play out in future years and keep premiums low remains to be seen. But for now the hard data suggests a subsidized Obamacare plan can cost as much for an individual as the average employer-based plan.

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