As Sen. Ted Cruz, R-Texas, continued to rail against the Affordable Care Act on the Senate floor Wednesday morning, the U.S. Department of Health and Human Services unveiled a report that showed average premium rates for health insurance marketplaces in 36 states would be far lower than initially projected.
"Across the board, six in 10 uninsured Americans will be able to find coverage for less than $100 per month," Health and Human Service Secretary Kathleen Sebelius said at a press conference on Tuesday. Consumers in 36 states will be able to choose from an average of 53 different plans when the new health insurance marketplaces, also called exchanges, open on Oct. 1, Sebelius said.
Obamacare's controversial individual mandate requires people who are currently uninsured to purchase health insurance by Jan. 1, 2014 or pay a penalty on their taxes. Plans available on the state marketplaces will be divided into tiers based on price, with "platinum" plans offering the most-comprehensive coverage (and the highest premiums) and "bronze" plans offering less-comprehensive but more-affordable options. In the lowest tier, plans offering "catastrophic" or bare-bones, emergency coverage will be available only to consumers who are under age 30 and unable to find coverage that costs less than 8 percent of their annual income. Tax credits, also called subsidies, will be available to help offset premium prices and out-of-pocket costs for many consumers.
The HHS report analyzed premiums and health insurance plans in the 36 states where the federal government will be running or helping to run the health insurance marketplaces. It also included data from the the District of Columbia and the 11 states that are running health insurance exchanges on their own. The report estimated that 95 percent of consumers would have two or more insurers to choose from, and showed that about 25 percent of the insurers participating in the marketplaces are new to the individual coverage market, which indicates that competition could help keep prices low.
"Now there will be more choice and more competition thanks to the marketplace, and most consumers will find they will be able to choose from multiple companies when choosing which plan works best within their budget," Sebelius said.
But the HHS report didn't include all health plans and rates available on the state marketplaces. According to the report, analysts focused only on plans with the lowest premiums in each state because "consumers are expected to shop for low-cost plans." Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, told reporters on Tuesday that the rates are still being finalized.
That means the report "doesn't give a complete story as to what the customer's going to be seeing," David Axene, a health care consultant and a fellow of the Society of Actuaries, the North American organization for professionals who analyze financial risk, told HealthDay. Though consumers will have more choices than expected, not all of those plans will be inexpensive, and shoppers will need to consider more than just prices. "From a consumer's perspective, they're going to have to evaluate things like, 'Is my doctor in the network?' and 'Have I heard of that plan before?'" he pointed out.
The report's release comes amid a flurry of political debate over the legislation and its implementation. The Republican-controlled House passed a bill last week that included a provision to defund Obamacare, a move the Senate is expected to reject. Monday, President Barack Obama sat down to talk about the law with former President Bill Clinton during a visit to New York to attend the U.N. General Assembly. Critics immediately pounced on the HHS report.
"There are literally no comparisons to current rates," Douglas Holtz-Eakin, president of the American Action Forum, told Politico. "That is, HHS [has] chosen to dodge the question of whose rates are going up, and how much."