Obamacare's Not-So-Scary New Math

The Atlantic
Obamacare's Not-So-Scary New Math
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Obamacare's Not-So-Scary New Math

One of the big fears about Obamacare has been that insurers will charge exorbitant prices for plans sold on state exchanges, meaning the law would have the opposite effect of its goal to make health care more affordable. But that's not happening in California. The state released the prices for plans sold on Covered California, the state's exchange, and they're much cheaper than expected, The New Republic's Jonathan Cohn and The Washington Post's Sarah Kliff explain. And that's a big deal, because California is the most populous state. Here's a breakdown:

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$450 a month: What the average "silver plan" — meaning medium level of coverage, or about 70 percent of medical expenses — was projected to cost, according to a projection from the actuarial firm Milliman.

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$300 a month: What the average "silver plan" will actually cost.

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13 percent: The amount the cost of premiums is expected to rise for California's Blue Shield plans — before subsidies. About 8 percent of 9 percent of that increase is from year-over-year increase in medical costs.

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$3,600 a year: The average price of one of the cheaper silver plans for a 40-year-old single person.

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$2,400 a year: The price of that silver plan for a someone making $29,000 a year, or 250 percent of the federal poverty level.

$700 a year: The price of that silver plan for someone making about $17,000 a year, or 150 percent of the federal poverty level.

$0 a year: The price of a cheaper bronze plan, which pays 60 percent of medical costs, for someone making $17,000 a year, or 150 percent of the federal poverty level.

$5,500 a year: The price of a typical plan from an employer.

Less than $45,960 a year: How much an individual can make and still qualify for a subsidy to help cover the cost of premiums.

7.1 million: Number of uninsured residents in California.

2.6 million: Number of Californians expected to get subsidies to buy insurance.

About 12 percent: Portion of Americans who live in California.

We've see this happen in other states. Earlier this month, rate proposals released by insurance companies in Washington state showed some people's premiums would actually go down. Premera Blue Cross had estimated that premiums would rise about 50 percent to 70 percentWhen Oregon released proposed health care premiums online in May, two insurers requested the chance to adjust their rates — to make them lower. Why is this happening? "The premiums and participation in California, Oregon, Washington and other states show that insurers want to compete for the new enrollees in this market," the Kaiser Family Foundation's Gary Claxton told The New RepublicThe glories of the free market.

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