The early stages of the Affordable Care Act will be upon us in three weeks or so. Those much-talked-about health-insurance exchanges, where 7 million or more Americans not currently covered by employer provided insurance can buy health care a la carte, open for business on Oct 1.
Ever since Obamacare was signed in to law in 2010, it's been a bit of a mystery what that health care will actually cost a consumer. But as that deadline draws near, we're starting to get an idea of the how much people will pay and what they're going get for their money.
Today, the Kaiser Family Foundation is out with the most comprehensive look at the cost and coverage so far, examining Obamacare plans available in 17 states and the District of Columbia.
“There's really going to be a lot of variation for people based on where you live, your age, and also whether or not you smoke,” study co-author Gary Claxton said of the costs.
Say you're a 40-year-old who chooses a Silver Plan -- the second-least expensive option -- with a deductible of $1,500 to $3,000, on average. The study calculates that if you live in Portland, Ore., you'd pay about $200 a month for the plan. If you live in Burlington, Vt., you'd pay almost $400.
But don’t forget tax credits, which will effectively lower the cost of premiums and out-of-pocket spending for folks with low to moderate incomes (up to 400% of the poverty level). Individuals would qualify if they make up to about $45,000 annually, and it’s estimated that four out of five people using the health exchanges will qualify for some sort of tax credit.
Claxton said tax credits could bring down the cost of a silver plan premium to less than $100 a month for a young person and make the cost of a less expensive bronze plan free, though it would come with a higher deductible.
On the other end of the spectrum, people over 60 who make too much money to be eligible for any tax credits “pay high premiums today, and they still will see high premiums” under Obamacare exchanges, Claxton said -- perhaps, as high as $700 a month.
Given such variation, estimates of “average” costs need to be taken with a grain of salt, cautioned Caroline Pearson with Avalere Health, a company that analyzes health care data and that published another study on Obamacare plan costs earlier this week.
Speaking generally, she said that without any tax credits, “a 40-year-old in most states -- if you are a prudent purchaser and really go and try to select one of the lower-cost product offerings that is available to you, you’re looking at about $200 to $300 a month in terms of average premium,” Pearson said. “That's still a meaningful chunk out of someone's budget if they're not currently paying for health insurance.”
Pearson also pointed out that people should remember what they will get for the money they spend, including free preventive care like mammograms and other screening tests. And perhaps most important, she said, are the out-of-pocket caps that come with all the plans.
“For any individual that is very chronically ill and has very high health care spending, the maximum out-of-pocket for them is going to be around $6,300 a year,” Pearson said.
Put another way: There's a lot less chance of going bankrupt because you get really sick.