story from Talk Business, a TCW content partner
Editor's note: Story is updated with a frequently asked questions segment.
The Arkansas Insurance Department released the costs of rate plans to be offered in the forthcoming state insurance exchange.
Four companies are offering bronze, silver and gold plans for health insurance for citizens who may qualify for tax credits or subsidies based on income. The four companies are Blue Cross Blue Shield of Arkansas, Celtic/Novasys (Ambetter), QualChoice of Arkansas, and national Blue Cross Blue Shield.
Insurance premiums for all individuals will vary by age, geography, family size, and tobacco use. Pre-existing conditions are no longer factored into premium costs. The plans will be sold on the Health Insurance Marketplace (HIM), an online exchange that will begin enrollment operations on Oct. 1 at www.arhealthconnector.org.
The plans, which can be found in an extensive “premium rate” chart at this link, are configured based on region of the state, age, and smoking and non-smoking status. The cost of the plans in the matrix may be reduced substantially once income levels are applied.
For example, the Insurance Department provided an example of a 30-year-old individual with no children who would pay an average base premium of $284.74 a month before credits. If the 30-year old’s income was $28,725 annually, the monthly premium average would fall to $192.70.
The Insurance Department provided another example where two 40-year old adults with two children could apply for a health plan in the marketplace at an average cost of $948.82 per month. That monthly calculation would be reduced to $117.75 with tax credits if household income was $35,325. For a family with $58,875 in annual income, the premiums would be reduced to $394.95 a month after credits were applied.
More specific examples include:
• A gold plan for a 55-year old non-smoker would be $699.85 per month before any income tax credits would be factored under an Ambetter plan, while a similar plan offered by QualChoice would run $653.38 per month;
• An Ambetter silver plan for a 45-year old smoker that also includes vision and dental insurance would run $475.63 a month before applying tax credits, while a standalone silver plan from Arkansas Blue Cross Blue Shield would cost $331.79 a month before credits; and
• A bronze Ambetter plan for a 35-year old non-smoker could run $223.81 a month before tax credits are applied, while a similar plan from National Blue Cross Blue Shield might run $345.63 a month.
Insurance Commissioner Jay Bradford said the approved premiums are as much as 25% below what had initially been requested for the individual market.
“The plans that will be offered in the Health Insurance Marketplace are new insurance products,” said Bradford. “All plans meet the requirement that health insurance coverage be offered to everyone, even those with pre-existing medical conditions. The plans cover the 10 essential health benefits, have no annual or lifetime limits and have no ratings on health factors.”
David Dillon, an Insurance Department actuary, said the premiums were lower than what was expected by independent forecasters.
“Over the last few months, the Arkansas Insurance Department carefully evaluated the reasonableness of the premium rates submitted for plans to be sold on the Health Insurance Marketplace,” said Dillon. “The average approved rate in the individual market is approximately 10% below what was projected by the Society of Actuaries.”
Dillon said this comparison includes adjustments to account for the fact that Arkansas was the only state that created a “private pption” for those Arkansans newly eligible for Medicaid.
Here are some Frequently Asked Questions to help you understand today’s numbers:
Q: Who is eligible for the plans released today?
Subsidy Eligibility is determined by these simple criteria:
• You must live in the U.S.
• You must be lawfully present in the U.S.
• You must not be incarcerated due to a conviction
• Must be under 65 years of age
Q: If my employer offers health insurance or I am currently on a health insurance plan, is this an option for me?
If you have insurance coverage – employer, Medicare, Medicaid, this doesn’t apply. But, depending on if your situation your employer insurance may not be deemed affordable (9.5 percent of household income for employee only coverage.) Because large employers are not required to offer all of the essential health benefits, consumers might want to look at the plan benefits as well as cost.
Q: What are the benefits we are to receive (gold, silver and bronze)?
Platinum – 90/10 Actuarial value
Gold – 80/20 actuarial value
Silver 70/30 actual value
Bronze 60/40 actuarial value
Q. What are the deductibles?
Not yet available.
Q. Which variables will affect a plan’s cost?
Age, geography, and smoker/non-smoker status can affect a plan’s cost. A participant’s income level will influence the amount of tax credit that will be received to offset costs of the premiums.