Study Finds Generally Lower Premiums from Health Insurance Marketplace

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Open enrollment in the new Health Insurance Marketplace — a part of the Patient Protection and Affordable Care Act (Obamacare) — began today, allowing individuals and families to purchase private insurance for coverage beginning January 1, 2014. A new Kaiser Family Foundation study provides an early look at insurance premiums in 2014 [1]. The report finds that U.S. consumers generally will see lower health insurance premiums through the marketplace.

The Health Insurance Marketplace, previously known as the health insurance exchange, is a set of government-regulated and standardized healthcare insurance plans in the U.S., from which individuals may purchase health insurance eligible for federal subsidies. While all insurance plans are offered by private companies, the Marketplace is run by either a state or the federal government.

The Kaiser Family Foundation report, based on information available from 17 states and the District of Columbia that have publicly released comprehensive data on rates or the rate filings submitted by insurers, offers a preview of how premiums for various coverage levels will vary across the country and how much consumers will pay with or without available tax credits.

The analysis compares the healthcare premiumsin the largest cities in each of the 17 states plus DC for young individuals, families of four, and elderly couples in various circumstances to illustrate the insurance rates they might pay. The study also reported premium costs after tax credits for lower income consumers.

“While premiums will vary significantly across the country, they are generally lower than expected,” the study concluded. “For example, we estimate that the latest projections from the Congressional Budget Office imply that the premium for a 40-year-old in the second lowest cost silver plan would average $320 per month nationally. Fifteen of the eighteen rating areas we examined have premiums below this level, suggesting that the cost of coverage for consumers and the federal budgetary cost for tax credits will be lower than anticipated.”