The Cost Of Health Insurance Has Increased Following the Passage of Obama-Care/The Affordable Care Act, but for Many the Net Cost Will be Less Because of the Substantial Subsidies Offered Through Covered California

Margy Wenham California Health Insurance Exchange Access
A recent article in Forbes magazine concluded that the Affordable Health Care Act (ACA), will increase underlying insurance rates for younger men by an astounding average of 97 to 99 percent, and for younger women by an average of 55 to 62 percent.  This is clearly contrary to what most television news networks have been reporting and the public announcement by the U.S. Department of Health and Human Services (HHS) that premiums offered in the exchanges will be “lower than originally expected.”  So how can the conclusions of Forbes and the HHS be reconciled?

Well first, the Forbes article was based on a Manhattan Institute’s analysis of the numbers HHS relied upon. They compared the cheapest plan available to 27-year-olds pre- and post-ACA. They then compared the cheapest plan available to the average exchange participant, and to the typical 40-year-old pre-ACA.   And based on those two comparisons, it is clear insurance premiums have increased dramatically since the passage of the ACA. The Manhattan Institute’s also pointed out that the HHS report made no mention of the premium cost of insurance available in today’s market and suggested the reason they did so is because the HHS knows premiums have increased dramatically.

Supporters of the HHS conclusion point out that that those who claim the passage of the ACA increased premiums do not take into account how much of a subsidy an individual may receive towards the purchase of a policy.   It has also been suggested that the actual cost of insurance doesn’t really matter as many will receive some kind of subsidy and it is the net cost to them is what really matters.

Turns out, both position are correct in a way.  That is, the true cost of health insurance has gone up dramatically, but for many, and because of the subsidies offered through the exchanges, the net or actual cost too many individuals will have decrease since the passage of the ACA.

So what is the average monthly cost of a health insurance plan?  Well, again it depends:  according to a Reutter’s study of based on data for approved insurance plans in 48 states, $328.00 is the national estimate for the cost of coverage when the ACA takes full effect next year.   If, however, the applicants have an annual income between 133% and 400% of the Federal Poverty Level (FPL), then they will receive a subsidy to purchase their policy.  How much of subsidy is, however, best determined by an experienced insurance agent trained and qualified to sell plans from Covered California.  Only then will an individual be able to determine if, in fact, the ACA has caused the cost of their health to be lower or higher.
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About the Author: Margy Wenham has been working as an independent insurance agent for over twenty (20) years in Redding, California. She represents most major insurance carriers, including Anthem Blue Cross and Blue Shield who are participating in Covered California.  She can be reached by calling 530.221.0955, emailing her at Margy@MargyWenhamInsurance.com or by going to one of her websites located at www.InsuredByMargy.com or www.CaliforniaInsuranceExchangeAccess.com.

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