A full picture of Obamacare’s restructuring of the healthcare industry won’t be available for a long time. But at least one major criticism — that the law will require people without employer-sponsored insurance to buy very expensive coverage — looks increasingly weak.
A new analysis from the Kaiser Family Foundation offers the clearest picture yet of how much Americans will have to pay for their coverage in the “healthcare exchanges” the government is setting up for individual insurance customers. Bottom-line costs will vary, as they do now, depending on location, income, age and other factors. But “while premiums will vary significantly across the country,” the report concludes, “they are generally lower than expected.”
“For example, we estimate that the latest projections from the Congressional Budget Office imply that the premium for a 40-year-old in the second-lowest-cost silver plan would average $320 per month nationally. Fifteen of the eighteen rating areas we examined have premiums below this level, suggesting that the cost of coverage for consumers and the federal budgetary cost for tax credits will be lower than anticipated.”
Supporters of the law have argued that competition among private insurance companies for the new customers the law will draw into the exchanges will keep premiums under control. They may have a point. In a few small states, such as Maine and Vermont, only a couple of insurers are participating in their exchanges. But most others in the Kaiser report have four or more competing for customers.
This, as Slate’s Matthew Yglesias noted, is “good news for Americans who are currently uninsured, who currently buy insurance on the individual marketplace, or who think it’s possible that at some point over the course of their life they might have to or want to switch jobs.” And, “Since the level of subsidies available to families of modest means is keyed in part to the price of insurance premiums, this is also good news for anyone who pays taxes or uses non-healthcare public services.” So, a lot of people.
There are caveats: Although Kaiser’s is the most comprehensive analysis so far, its information is incomplete, using data from just 17 states and the District of Columbia. And the report’s conclusions don’t mean that people won’t have to pay a good chunk of their income for health insurance, even after they factor in federal assistance. “A 40-year-old with an income of 250 percent of the federal poverty level (roughly $29,000 per year) would pay about 8 percent of his or her income or $193 per month to enroll in the second-lowest-cost silver plan, regardless of the rating area,” the report finds.
Yet Kaiser’s report indicates that people would have good health-coverage options, regardless of their medical histories, at prices that won’t break the bank — or put an unanticipated burden on the federal Treasury.