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In 2009, the Congressional Budget Office predicted that a medium-level “silver” plan — which covers 70 percent of a beneficiary’s expected health costs — on the California health exchange would cost $5,200 annually. More recently, a report from the consulting firm Milliman predicted it would carry a $450 monthly premium. Yesterday, we got the real numbers. And they’re lower than anyone thought.
As always, Sarah Kliff has the details. The California exchange will have 13 insurance options, and the heavy competition appears to be driving down prices. The most affordable silver-level plan is charging $276-a-month. The second-most affordable plan is charging $294. And all this is before subsidies. Someone making twice the poverty line, say, will only pay $104-a-month.
Sparer plans are even cheaper. A young person buying the cheapest “bronze”-level plan will pay $172 — and that, again, is before any subsidies.
California is a particularly important test for Obamacare. It’s not just the largest state in the nation. It’s also one of the states most committed to implementing Obamacare effectively. Under Gov. Arnold Schwarzenegger — remember how that really happened? — California was the first state to begin building its insurance exchanges. The state’s outreach efforts are unparalleled. Its insurance regulators are working hard to bring in good plans and make sure they’re playing fair. If California can’t make the law work, perhaps no one can. But if California can make the law work, it shows that others can, too.
And perhaps others will. We’re beginning to see competition drive down proposed rates in some exchanges around the country. Remember Maryland, where CareFirst grabbed headlines with a shocking 25 percent proposed increase in rates? More plans have streamed in with lower bids. Kaiser Permanente, for instance, is only increasing its rates next year by 4.3 percent — a modest increase that will make CareFirst’s proposal almost impossible to sustain. My guess is when the exchange actually opens in October, CareFirst will have dropped its price substantially. If they don’t, then Kaiser and others will grab all the market share.
The way this competition can drive down rates is already evident in Oregon. There, one insurer came in with monthly premium costs in the $169 range, while other insurers asked to charge more than $400. But then, seeing what their competitors were charging, two insurers came back to the state’s regulators and asked if they could refile at lower rates. Otherwise, they wouldn’t be competitive in the exchange. The Obama administration was ecstatic to see this: It’s exactly what they’re hoping will happen across the country.
Of course, California and Oregon are managing Obamacare particularly well. But the state-by-state nature of the Affordable Care Act creates really unusual political dynamics around how the law is perceived in its first year.
Imagine it’s the end of 2014. California now boasts a working, near-universal health-care system. Nothing perfect, but clearly a a success after the first year of implementation. Texas, meanwhile, is a bit of a mess. They didn’t allow the Medicaid expansion so the state’s poorest residents got nothing. They didn’t help with the exchanges, or the outreach, so there aren’t many choices, and premiums aren’t as low one might hope.
Viewed in isolation, Texas’s problems would be deadly for the law. But viewed next to California, they might mainly be a problem for the political class in Texas, which has failed to implement a clearly workable law.
Wonkbook’s Number of the Day: 115,000. That’s how many federal employees will be furloughed today due to sequestration. Three major agencies — the IRS, the EPA, and HUD — are closing their doors.
Wonkbook’s Quotation of the Day: “Don’t ask me how, because if I knew, I would certainly tell you, but the House is going to — the House is going to work its will,” said House Speaker John Boehner on immigration reform legislation.
In 2009, the Congressional Budget Office predicted that a medium-level “silver” plan — which covers 70 percent of a beneficiary’s expected health costs — on the California health exchange would cost $5,200 annually. More recently, a report from the consulting firm Milliman predicted it would carry a $450 monthly premium. Yesterday, we got the real numbers. And they’re lower than anyone thought.
I get paid 17k per year. I pay 9,000 just in rent per year. So that leaves me with 3k (give or take a couple hundred) to pay for utilities, car insurance, and food.
How is this good? Ooooh right...its good for the insurance companies!
I get paid 17k per year. I pay 9,000 just in rent per year. So that leaves me with 3k (give or take a couple hundred) to pay for utilities, car insurance, and food.
How is this good? Ooooh right...its good for the insurance companies!
As mentioned that doesn't include subsidies for lower incomed individuals. A hundred bucks a month minus the subsidy.
Not to mention you would then have insurance...which is a pretty big deal.
I don't need insurance right now thank you. Me and my family are quite healthy. I would rather spend that money on things that I need. Such as a new car and a house for our very own so that I don't have to pay rent and live by other peoples rules. So no, not a big deal to me. Prolly even less of a big deal to a college kid.
As for the subsidies..whoopie do. I'm quite sure that the amount that we will have to pay in deductibles will exceed that amount if I do happen to need health care.
I don't need insurance right now thank you. Me and my family are quite healthy. .
As mentioned that doesn't include subsidies for lower incomed individuals. A hundred bucks a month minus the subsidy.
Not to mention you would then have insurance...which is a pretty big deal.
I don't need insurance right now thank you. Me and my family are quite healthy. I would rather spend that money on things that I need. Such as a new car and a house for our very own so that I don't have to pay rent and live by other peoples rules. So no, not a big deal to me. Prolly even less of a big deal to a college kid.
As for the subsidies..whoopie do. I'm quite sure that the amount that we will have to pay in deductibles will exceed that amount if I do happen to need health care.
I don't need insurance right now thank you. Me and my family are quite healthy. I would rather spend that money on things that I need. Such as a new car and a house for our very own so that I don't have to pay rent and live by other peoples rules. So no, not a big deal to me. Prolly even less of a big deal to a college kid.
As for the subsidies..whoopie do. I'm quite sure that the amount that we will have to pay in deductibles will exceed that amount if I do happen to need health care.
You enjoy Russian Roulette!! I'm glad you won't have to play it with your family anymore. Even if you're not.
Except he will be able to. Idaho opted out of the Medicaid expansion. With a family and $19K income he will be one of those people who gets left in the gap. He won't be penalized because of his income so if desires not to participate in the national exchange, there is nothing to stop him or even discourage him.
Well. Then he's a happy camper. Maybe. If the creek don't rise.
Well. Then he's a happy camper. Maybe. If the creek don't rise.
the best news for the PPACA would be if we decided to scrap it for UHC.
i could be wrong, but my guess is that it's just going to result in a bunch of minimal coverage plans that weasel their way out of covering anything. at least it killed the preexisting condition BS. that's one good thing i can say about it, but that could have been done separately.
they should have just let anyone buy into medicare. that would have been the best choice out of the options on the table. my guess is when the whole system collapses under its own weight, that will probably be what we build next.
I am not opposed to UHC so long as there is salary containment mechanisms. We would do well to pair that up with immigration reform to allow all comers in the nursing-doctor-health tech world.
Salaries for whom? Physicians only constitute 8.6% of of all healthcare costs in this country, which mind you, is lower then almost any other country in the industrialized world.
Besides, who are you to say what someone who obtains 16 years of secondary schooling is worth?
I am not opposed to UHC so long as there is salary containment mechanisms. We would do well to pair that up with immigration reform to allow all comers in the nursing-doctor-health tech world.
In the case of UHC, one of the one's paying the bill. If we can get a doctor from India or Pakistan who will work for less, then we should get them. That is how supply and demand works.
yeah, that's pretty much going to be necessary. we have to reverse the artificial doctor shortage, and we're going to have to do something about medical malpractice lawsuits. also, it should not cost a billion dollars to get a drug into phase three.
my hope is that when most of the basic care is being paid for by one source, that source will have more bargaining ability. doctors in other first world countries still do pretty well.
They also have far lower standards for their med schools. Let me ask you, would you want someone who went to a school in Pakistan or in the US to be performing a lifesaving procedure on you? I'm willing to bet you'd want someone from the US, but you expect the rest of us to be okay with the doctor from Pakistan.
One of them darned foreigners did a pretty good job of saving my dad's life. :shock:
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