ObamaCare exchange prices set, cost of coverage soars

Americans planning on buying an individual health insurance policy on ObamaCare’s state exchanges when they open at the beginning of the month can expect to pay much more than what they would if the law hadn’t been enacted.

The Obama Administration released the rates yesterday for the state exchanges that will be run by the federal government (these are states that opted out per the 2012 Supreme Court decision on the law). While the media notes that the rates are lower than originally estimated, that may not quell concerns about affordability.

The Wall Street Journal provided an analysis of the 36 states where the federal government will oversee the exchanges. A quick glance shows that those who will purchase coverage may be in for rate shock.

For example, a 27-year-old non-smoker living in Birmingham, Alabama would have paid $80 per month ($960/year) for the lowest-cost plan before ObamaCare. But the lowest “bronze” plan available on the exchanges will cost that person $170 per month ($2,040/year). That’s 112% increase. The same person living in Delaware can expect to pay $203 per month ($2,436), which is nearly a 300% increase from the $51 pre-ObamaCare rate.

In Ohio, this person would see a 336% increase, from $47 per month ($564/year) before ObamaCare to $205 per month ($2,460/year) if they purchased the so-called “bronze” plan available on the state exchange.

Now, these premiums don’t include the subsidies available to individuals who purchase coverage on the state exchanges. If the 27-year-old non-smoker living in Columbus, Ohio made $25,000 per year, they would receive a tax credit of $760 to help cover the cost of their yearly premiums, according to the Kaiser Family Foundation’s subsidy calculator.

Even with the subsidy, this person would still see a 200% increase between pre-ObamaCare rates and the anticipated premiums under law’s “bronze” plan. If this person made more money, the amount of the subsidy would decrease, eventually to the point where no tax credit would be available at all. Roughly half of Americans who will purchase coverage on the exchange, Bloomberg notes, will not have access to subsidies.

Not all states will experience such extreme price increases, but every state in which the federal government will control the exchanges will see an increase between the price of pre-ObamaCare rates and the plans available at the beginning of October.

To say that these rates are “lower than expected” is not a point around which to rally, as the Obama Administration and many Democrats have done. The may say that Americans are getting more for their buck given that new plans have to cover so-called “minimum essentially benefits.”

But for many Americans, ObamaCare will dramatically increase the cost of health insurance coverage to the point that many, especially young people, will go without rather than see their standard of living decrease by paying more of their pocket for coverage.

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