Without getting too messy in all the numbers, health insurance costs are going up, way up.
Ohio officials have said health insurance rates will increase “significantly” under the Affordable Care Act. With the average individual premium going from $223 to $420, which comes out to an average of around 88 percent.
There have been 14 insurance companies who filed proposed rates for 214 different plans to the department of insurance for the upcoming marketplace. Prices for these plans to cover all 10 essential health benefits ranged from $282.51 to $577.40 for individual health insurance plans.
What Does it All Mean?
Here's the deal, if you meet the income requirements to qualify for marketplace tax credits those numbers are irrelevant to you. Your health insurance will be dramatically more affordable.
If you don't, well... Put on your hard hat because you're going to take a beating from the Affordable Care Act.
What are the Income Requirements Again?
These are just my rough estimations, but here's a look at the incomes ranges:
- Individual - $11,615 - $46,600
- Family of 2 - $$15,730 - $62,900
- Family of 3 - $19,810 - $79,210
- Family of 4 - $23,800 - $95,500
You can figure out your exact income and the amount of assistance you will qualify for by using this subsidy calculator.
Do You Have to Buy a Plan From Ohio's Marketplace?
No.
In fact, if you don't qualify for those tax credits, there is little incentive for you to do so. You will be able to buy the same health insurance on the “private” market just like you would today.
What's the Difference Between the Marketplace and Private Plans?
Really, nothing.
You will be buying the same plans from the same insurance companies. The only difference is people who qualify for financial assistance through the Marketplace will only be allowed to pay a maximum of 9.5% of their total annual income for health insurance.
Why Are Costs Increasing?
The main reason is due to the additional or mandated benefits health care reform calls for. You toss in a little community rating and constant medical inflation and that's a pretty effective recipe for more expensive health insurance.
So... It's Really Not the “Affordable” Care Act?
Bingo.
You can't expect to lower the price of health insurance without addressing the high cost of what it's trying to insure.
It's kinda like yelling at a garbage dump for making too much trash. They aren't making the garbage, they are just taking care of it the best they can.
Now sure, you can question if insurance companies are doing their “best” to prevent healthcare cost from overflowing into your bank account. If we're being honest, even the greediest, most diabolical insurance company couldn't get away with these increases and still be in business.
Is this happening just in Ohio?
Nope.
California got caught with their hand in the cookie jar a few weeks ago. They bent and stretched the truth about their recently released marketplace rates to the point they were unrecognizable.
They tried to compare the new marketplace numbers to their current group market, claiming marketplace rates would be 2% - 29% cheaper than today.
What California forgot to tell everyone is that, on average, a health insurance plan purchased through a company is double that of an “individual” plan. When they went back and compared today's individual plans to the new marketplace plans, they found a significant difference.
A typical 25-year-old man will pay roughly 64% to 117% more for an “Obamacare” plan than the five cheapest policies sold today. For a 40 year old male, it's 73% to 146%
So, What Should You Do?
The first step would be to see if you qualify for a tax credit through the marketplace. If you do, you will want to familiarize yourself with the enrollment and application process and get ready to apply on October 1st of this year.
If not, you could consider taking a pay cut, or becoming a professional treasure hunter. All jokes aside, the truth is there really isn't a good answer for people who don't qualify for the “Affordable” Care Act. You are simply going to have to pay more for your health insurance next year.
Is There a Silver Lining?
Like I have been saying, the Affordable Care Act's greatest achievement is providing guaranteed access to health insurance. If you have a pre existing condition that has prevented you from getting health insurance, as of January 1, 2014, those days are over.
Now let's just hope you can afford it.
Learn more about your specific situation.