Health Care Marketplace provides competitive rates

Aug 27, 2013

Health Care Marketplace provides competitive rates

Many of us already know that there will be new ways to obtain health insurance starting in 2014.  After a long process following the passage of the Affordable Care Act in 2010, which included a Supreme Court decision and a Presidential election, we are now approaching the time when health insurance will be within reach for most Americans.  Many call this Obamacare, but few really understand what it’s all about.

It’s important to remember that many people in 2013 do not have health insurance.  Others are spending a large part of their income to purchase insurance which only covers catastrophic events.  All of these people are much less likely to use preventative health care, or to seek medical care in a timely manner.  They are more likely to be sick and to live without treatment of a chronic illness.  They are more likely to die.   And they are also more likely to have outstanding debt or bankruptcy as a result of no or inadequate health insurance.

The new approach that’s embodied in Obamacare will make affordable health insurance available to many of these people.  Because of this, we can expect to see improved health and improved financial security when the program goes into effect, which is about to happen.

Starting October 1, about a month from now, people will be able to go onto the internet and buy health insurance for themselves and their family.  This insurance will take effect on January 1st of 2014.  The opportunity to sign up will be extended through March of 2014 for this first year, but after that the time to sign up will be the last three months of the preceding year.  For example, choices will need to be made in the last 3 months of 2015 for the year 2016.

As a direct result of the Affordable Care Act, there will be three competing insurance companies offering health insurance here in Montana.  This health insurance will be sold on what is now called the health insurance marketplace, which was previously called the exchange.   This is basically an internet site run by the federal government for Montana, where private individuals, small groups, insurance agents, and some trained counselors can go, starting on October 1st, to sign up.  The costs of buying this insurance have just been released by the office of the Montana Insurance Commissioner.

What we are seeing here in Montana is the same as competitive markets in other areas of the country.  The price of this insurance is lower than what a person can buy today.  And in general the benefit package is better than what’s now being offered in many plans.  A big plus for individuals with prior health issues is that they pay the same premium, depending only on age and smoking status, as someone with no prior health related issues.  People with medical problems are not charged more and they can’t be refused insurance.   There are no lifetime limits on total spending.

It will be easy to go on line and compare the costs of similar plans offered by these three insurance companies; something that has been impossible to do until now for people trying to buy health coverage.  People and small groups can make their own choice about how much they are willing to spend for what level of financial coverage.  A lower cost plan provides a similar benefit package, but involves additional spending if a medical problem arises.  The higher priced plans involve less risk, with more of the medical costs covered.  Preventive services will be 100% covered in all plans.

For many Montanan’s, there will be substantial cost savings because of federal subsidies.  For example, an individual earning between $11,500 and $15,000 in 2014 will pay only 2% of their total income, around $300/year, in order to purchase a silver level plan which will cover 70% of average health care spending.  If that person instead chose a lower priced bronze level plan, which covers 60% of average costs, the insurance itself would cost essentially nothing, though out of pocket spending, if needed, would be higher.  There will also be help with the out of pocket spending component for individuals earning up to $29,000/year, and families at a higher level of income.  Native Americans will have added benefits.  Families of 4 earning up to $94,000/year will be eligible for financial subsidies to purchase the insurance so up to about 80% of Montanans could be affected.  These subsidies for purchase and help with out of pocket spending are only available if insurance is purchased through this individual marketplace.

Many large employers will continue to provide their employees with health insurance next year.  But small employers should be re-evaluating their options.  For many, helping their employees to buy subsidized insurance through the marketplace will be the best approach.

Go to<> for federal information that is state specific.  Our state insurance commissioner’s site is<>.  The Montana Health CO-OP, Blue Cross, and Pacific Source also have information on their web sites.

All in all, it looks like this complex and comprehensive program is about to do much of what was originally hoped for; to bring comprehensive, affordable health insurance to most people so that they can and do get the medical care they need.  This is a huge step forward for this state and this country.