Q&A: Buying Your Own Health Insurance Under 'Obamacare ...

By Louise Radnofsky

Video: Louise Radnofsky on the costs of insurance in the new exchanges.

People have lots of questions today about what will happen to the amount they pay for insurance this fall, when the federal health-care law?s insurance marketplaces open, selling individual policies subject to the new requirements of the law. And we have answers.

Who will use the insurance exchanges?

The exchanges are aimed at the 20% of people who don?t have insurance through their employer, the federal Medicare insurance program for the elderly, or Medicaid, the federal-state health program for low-income Americans. Some of those people already buy insurance on their own, and others are uninsured. If you currently get health coverage through an employer, Medicare or Medicaid, the rollout of these exchanges won?t directly affect you.

What are the plans like?

The law requires many plans to have fuller benefits than they did before, because they have to include things like emergency services, maternity coverage, prescription drugs and preventive care. They also have to cover at least 60% of medical costs, on average. Higher tiers of coverage will also be sold.

How much will these plans cost?
The least-expensive plan available to a 40-year-old nonsmoker in Richmond, Va. will be $193, based on filings of proposed premiums submitted by carriers. The most expensive plan submitted now for that same person, which covers more costs, includes pediatric dental benefits, and could also have a wider network of providers, is $488. (Related: ??Health-Insurance Costs Set for a Jolt.?)

What about the rest of the country?

In Ohio, carriers whose filings are available are proposing monthly premiums starting at $211 for a 40-year-old nonsmoker living in Columbus for a plan that covers 60% of costs. In Atlanta, Georgia, the least-expensive bid for such a plan is $212. In Olympia, Wash., a carrier has proposed charging $220 and in Hartford, Conn. early filings show such a plan could start at $242. In a few places, lower-cost options may be available. In Washington, D.C., the cheapest premium for a 40-year-old nonsmoker?s plan covering 60% of costs is $166, and in Nashville, Tenn., a plan is set to be available for $149 a month. (For more about California, see here.)

Is that more?
Insurance is changing ? and so is its price-tag. Some of the most low-cost options won?t be available anymore because of requirements under the law. Supporters of the law say the new products have better consumer protections and so are more valuable. At the same time, the way individuals pay for insurance is changing too. The law requires insurers to treat all consumers of the same age, in the same area, equally. They can?t ask about medical history or charge different prices. The only other factor on which their risk is rated is whether they smoke. As a result, healthy people who are currently offered attractive rates might find that they can?t get the same deals they?re used to. Sick people who currently can?t get insurance at all or find that the premiums they are offered go up after a medical questionnaire might find they pay less.

What about subsidies?
The law says that people are eligible for tax subsidies toward the cost of premiums if they have incomes up to four times the federal poverty level ? anywhere up to $45,960 for a single person and $94,200 a year for a family of four. But the value of those subsidies is determined based on the cost of insurance premiums in any given area, and when we ran the numbers for Virginia, we found that an individual would start to get a $0 subsidy after their income exceeded $33,150. Some of this will vary by state, and of course, family plans cost more and subsidies are also more generous.

How long are the prices you?re talking about going to stay that way?
Supporters of the law say that when people are able to really compare insurance policies that are more uniform ? and the price they see is the price they can get, regardless of their medical history ? insurers will be forced to compete with each other more closely and rates will go down over time. Skeptics are worried that if not enough healthy people are willing to buy insurance at the rate of around $200 a month, they could choose to go without coverage and pay a relatively small penalty instead, and insurers would have to raise premiums to take into account that they were covering mostly sicker people.

Source: http://blogs.wsj.com/washwire/2013/07/01/qa-buying-your-own-health-insurance/

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