PREMIUMS UNDER OBAMACARE MRS 2014

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Whats in Store for Premiums and
Cost Sharing Under Obamacare?
PREMIUMS UNDER OBAMACARE MRS 2014
Supporters of Obamacare had
something to brag about when
average insurance premiums didnt
rise to the sky as predicted by
opponents of the new law. While
many still saw modest increases, the
actual sticker shock was reserved for
much smaller groups.
For instance, women between the
ages of 55 and 64 experienced
average increases in premiums and
out-of-pocket expenses of around 50 percent. Still, with the good numbers concealing the
bad when calculating averages, the majority fared pretty well.
Reportedly, the majority of Americans (60%) do not feel that the new healthcare law has
personally a!ected them. Of those who said they did feel a!ected by the law, more
reported the e!ect to be negative rather than positive. Furthermore, of those who report
negative e!ects, the majority were Republicans, while Democrats reported mostly positive
e!ects, if any.
Another study revealed that half as many Republicans as Democrats claim to know
someone who was able to obtain insurance under the new law, and fewer Democrats than
Republicans claim to know someone who lost coverage or had their job directly a!ected
because of it.
Given the obvious division of opinion between political sides, and the way in which the data
was obtained, there is a possibility that the reports are swayed by political beliefs or that
among members of each party are di!erent interpretations of what constitutes a positive
or a negative e!ect.
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Reportedly, the majority of Americans (60%) do
not feel that the new healthcare law has
personally a!ected them.

PREMIUMS UNDER OBAMACARE MRS 2014

Obviously, since a persons healthcare needs dont vary due to their political a"liations,
there must be a way to dig down to the core of Obamacare to see what we can expect in
the coming months and whether or not the public can bene#t as a whole.

It has proven di"cult to #nd comparable policies and prices that were available pre-
Obamacare, because of the proverbial hoops through which insurers must jump in order to
construct plans that comply.

Now that we have part of a years prices to analyze and compare, we can take a look at the
proposed rates insurance companies have already released for next year as well as expert
feedback.

Reports show that many more

insurance companies will be joining
those brave souls who jumped into
the marketplace for the #rst year to
o!er their services. This de#nitely
has the ability to create more
competition, thus lowering prices
overall.

Based on the numbers received this

year, it looks as if the larger
companies will be those with the higher increases and the smaller companies will be those
o!ering lower prices to ramp up business. Because of this, the millions of consumers who
bought plans last year may now #nd it necessary to do some price comparison to see if
they are getting the best deal.

Insurers report a di"cult time proposing rates as they really dont have enough solid data
on the consumers usage of health services, as many people didnt enroll in health plans
from the exchange until right before the March deadline. One thing they have this year that
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Better Premiums?
PREMIUMS UNDER OBAMACARE MRS 2014
they didnt have last year, though, is the knowledge of where some of the other insurers are
in the market.

In 2014, the insurance companies with the highest enrollment numbers o!ered either the
lowest or second-lowest premiums in the marketplace. Now, these carriers seem to feel
they have negotiating power and the ability to raise their rates. Such carriers are proposing
increases around 8.5 22.8 percent for 2015. Most rate increase proposals are staying
around 10 percent, though. The interesting fact about the 10 percent mark is that the
companies who propose increases of 10 percent or higher have to publically announce
their justi#cation for such increases.

If that isnt slightly comforting to the

wal l et , ot her provi si ons of t he
A!ordable Care Act also assist in putting
a stop to any rate increase that is
deemed unreasonable. For instance, no
less than 80 percent of the premiums
received by insurance companies must
be spent on the medical claims or on
the enhancement of care. Those who do
not comply are required to refund the
excess premiums collected to the
consumers.

Continuing the trend, the insurance companies with the lowest number of enrollments are
planning to cut their premiums in an attempt to gain more market share. Some propose
decreases of up to 22 percent.

For those who dont mind switching companies, this can be a true breath of fresh air. Of
course, other factors must be considered, such as the services that are covered as well as
another companys network possibly narrowing your ability to keep your preferred doctor.
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Cost Sharing
PREMIUMS UNDER OBAMACARE MRS 2014
The highest out-of-pocket costs are typically associated with the bronze plans. They
generally have the lowest premiums, hence their allure. Bronze is the absolute minimum
plan in which a consumer can be enrolled and still be considered compliant under the
A!ordable Care Act.

It is di"cult to gauge where each individual plans out-of-pocket expenses will be as there
are so many variables. Likewise, di!erent insurers may o!er bronze, silver, gold and
platinum plans on the same exchange but the cost of ones bronze plan (supposedly the
lowest) may cost more than another companys silver plan.

Typically, the higher the plan purchased, the higher the premium and the lower the out-of-
pocket costs are. Some studies have shown that, under typical circumstances, there is not
much #nancial bene#t to be gained by purchasing any higher plans as the out-of-pocket
costs usually balance out the premium di!erence.

It is recommended that consumers who are unsure about this try two di!erent plans in
consecutive years to get a feel as to whether or not ones bene#ts outweigh the others.
Unlike the advanced premium tax credit that helps pay premiums purchased through the
exchange, this subsidy is designed to help with out-of-pocket costs. The cost sharing
reduction subsidy assists those whose income falls below 250 percent of the federal
poverty level. The amount varies based on income. The closer to the federal poverty level,
the less the consumers out-of-pocket maximum will be. If an individuals income is
between 100 and 200 percent of the federal poverty level, their out-of-pocket limit will be
one-third that of someone without the subsidy. For those whose income is between 200
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Government Subsidies
Reportedly, the majority of Americans (60%) do
not feel that the new healthcare law has
personally a!ected them.

PREMIUMS UNDER OBAMACARE MRS 2014

and 250 percent, their out-of-
pocket maximum is reduced by
one-#fth. The exact amount will
change each year since the out-
of-pocket maximum and the
federal poverty level $uctuate.

Many other stipulations exist for

those who wish to take advantage
of this subsidy. The plan must be
purchased through the exchange.
The plan must also be a silver plan
(which happens to be the most popular plan purchased). Married people must #le their
taxes as married #ling jointly. You must be a legal resident of the United States, and you
cannot be in jail or prison.

The system is still in its new stages, and some elements of the A!ordable Care Act have still
not been implemented and other areas are not yet fully understood by the insurers and
the consumers. Whats more, consumers are still trying to #nd that perfect plan with a
reasonable price while insurance companies are trying to gain more market share and
make a decent pro#t.

So until a balance is struck and both sides get a little more comfortable, prices will likely
change at varying degrees with little predictability. Fortunately, more and more insurance
companies and individuals are realizing its potential and are pleased with the expanded
access to healthcare.
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