The effective date for the state and federal health insurance exchanges is right around the corner, and details on costs and levels of coverage according to location are starting to unfold.
The Office of the Assistant Secretary for Planning and Evaluation, along with the Department of Health and Human Services, today released an issue brief giving examples of the cost of health care purchased in 36 states on exchanges that will be supported or fully run by the federal government.
Enrollment onto the exchanges, a key part of the Patient Protection and Affordable Care Act of 2010, will begin on Oct. 1, with coverage kicking in on Jan. 1.
According to the report, close to 95% of customers will be able to choose between at least two health insurance companies, which is key since the size of the market varies from state to state. Those who are in states where marketplaces will be run by the federal government will have an average of 53 qualified health plan choices.
The 36 states working with federal exchanges include Alaska, Alabama, Arkansas, Arizona, Delaware, Florida, Georgia, Iowa, Idaho, Illinois, Indiana, Kansas, Louisiana, Maine, Michigan, Missouri, Mississippi, Montana, North Carolina, North Dakota, Nebraska, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, West Virginia and Wyoming.
Though all of the plans will cover similar services, they are grouped into tiers based on how much of the cost is shared between the insurer and the customer. Higher tiered plans will require customers to pay higher premiums, but require insurers to pay a greater amount of the cost. Platinum plans, for instance, cover 90% of expenses. Gold covers 80%, while silver foots the bill for 70% and bronze 60%.
According to the report, the weighted average lowest monthly premiums for a 27-year-old in the 36 states will be $129 per month for a low-end catastrophic plan, $163 for a bronze plan and $203 for a silver plan. That's before the tax credits that are applicable to people and families with household incomes that are between 100% and 400% of the federal poverty level.
For those who can qualify for tax credits, a 27-year-old in Texas with an income of $25,000 could pay as little as $145 per month for the second-lowest-cost silver plan and $83 per month for the lowest-cost bronze plan. Similarly, a family of four with an income of $50,000 in the Lone Star State could shell out $239 per month for the lowest silver plan and $57 per month for the lowest bronze plan after tax credits, according to the report.
Even if the typical wealth management client likely wouldn't qualify for the tax credit, this update on pricing is especially meaningful for clients who wanted to retire early or who are between jobs, noted Carolyn McClanahan, an adviser at Life Planning Partners Inc. “For someone with health issues, the biggest concern is if they're not employed or want to retire early, can they even get health insurance?” she said. “Yes, they can. That's the great thing about the law.”
From a planning perspective, even though the data only covers the 36 states that will have their exchanges overseen by the federal government, advisers and clients have enough information to begin hashing out how much clients will have to shell out for coverage and what exactly they will getting for that premium. Data for state-run exchanges is up on those states' websites.
“A number of our clients can't quit their job or they want to retire, and this is a new door for them,” Ms. McClanahan said. “We have a list of people we'll look up on the exchanges as soon as they open.”