Health insurance premiums for the Affordable Care Act’s (“Obamacare”) marketplaces will be 16 percent lower than previously projected, according to the latest estimates from the nonpartisan Congressional Budget Office.
The report, released on Wednesday by the U.S. Department of Health and Human Services (HHS), comes less than one week before online marketplaces are set to open on Oct. 1.
In Ohio, the average 27-year-old making $25,000 a year will have to pay $145 a month after tax credits for the second cheapest “silver” plan, the designation given to the middle-of-the-pack plans under Obamacare. Without tax credits, the second cheapest silver plan would cost the 27-year-old $212 a month.
Meanwhile, the average Ohio family of four making $50,000 a year will have to pay $282 a month after tax credits for the second cheapest silver plan, or $486 less than the plan would cost without tax credits.
Under Obamacare, online marketplaces will allow consumers to compare and purchase health insurance plans in the individual market. Participants with an annual income between 100 percent and 400 percent of the federal poverty level, or individuals making between $11,490 and $45,960, will also be eligible for tax subsidies, with the highest incomes getting the smallest subsidies and the lowest incomes getting the largest.
The plans only apply to the individual market, which means the majority of Americans, who are currently getting insurance through an employer or public programs, will be under a different insurance system and won’t qualify for the online marketplaces’ tax subsidies.
HHS estimates the average Ohioan will be able to choose between 46 different plans, excluding catastrophic options.
Some states will be less fortunate, with Alabamians in particular only having an average of seven plans to choose from.
The plans will be designated as bronze, silver, gold or platinum, with bronze covering less services but costing the least and platinum covering more services but costing the most.
The federal government was originally expecting states to set up most of the online marketplaces, but it’s had to carry some or the entire burden in 36 states, including Ohio, after state governments refused the full task.
Beating projections doesn’t necessarily make Obamacare a success.
The outreach efforts are important to the law’s success because the federal government estimates it will need to enroll 2.7 million young adults out of the 7 million it expects to sign up overall. Otherwise, Americans who are older — and therefore less likely to be healthy — will fill up the marketplaces, exhaust health services and drive up costs.
At the same time, Republican legislators in Ohio and other states have put restrictions on some of the outreach efforts to avoid what Republicans call potential abuses and conflicts of interest. In Cincinnati, the state-level restrictions have blocked Cincinnati Children’s Hospital Medical Center from participating as a “navigator,” or a group that will help guide the uninsured and others through the enrollment process.
CityBeat covered the outreach efforts and Republican efforts to obstruct them in further detail here.
Update: Clarified metal-based classifications for different health care plans.