Alabama health insurance exchange rates released [Montgomery Advertiser, Ala.]

Sept. 26--Insurance plans offered through a health insurance exchange may be cheaper and offer more benefits than what uninsured Alabamians currently can obtain.

Estimates released by the Department of Health and Human Services on Wednesday showed Alabamians participating in the exchanges would pay an average of $247 a month for the lowest-cost, highest-deductible plans, with a higher premium plan averaging out to $303 a month. Both figures are lower-than-average for current plans in the state.

In addition, the plans will be required to cover prescription drugs, mental health services, hospitalization, rehabilitation and other services.

Jim Carnes, a spokesman for Alabama Arise who has worked on health insurance issues, said Wednesday that the group was "pleased" with the rates in the exchanges.

"They're lower than what some had projected, and Alabama looks like it's in good shape," he said. "Alabama has among the lowest level of competition in our insurance market. We're hoping this expansion of private insurance market will encourage more competition."

Prices on the exchanges will vary, depending on age, but HHS reported that Alabamians will tend to pay less in the exchanges than they would with current plans. The Affordable Care Act defines four levels of coverage -- bronze, silver, gold and platinum -- and requires insurers participating in an exchange to offer at least one gold and one silver plan.

An individual in a bronze plan would pay the lowest premium, but only see 60 percent of their health costs covered by the plan. Silver plans would have higher premiums, but cover 70 percent of those costs.

The exchanges were set up under the Affordable Care Act, popularly known as Obamacare. Under ACA, the exchanges must begin offering plans starting Oct. 1, with coverage beginning <chron>Jan. 1. The ACA requires uninsured individuals to obtain insurance by Jan. 1 or face a tax penalty. However, subsidies for the health insurance plans will be available to individuals and families making up to 400 percent of the federal poverty level.

A Commonwealth Fund study published last year found that the average individual health insurance plan cost about $402.33 a month in Alabama in 2011. The average family plan ran to about $1,079 a month.

According to HHS, a family of four consisting of a 40-year-old, a 38-year-old and two children that makes $50,000 a year would pay an average of $112 a month for the lowest-cost bronze plan after receiving tax credits through the exchange. The same family would pay an average $757 a month for the second-lowest cost silver plan, after tax credits.

A 27-year-old making $25,000 a year would pay $98 a month after tax credits for the lowest-cost single plan, and $209 a month for the second-lowest cost silver plan, again after credits.

HHS did not release estimates for gold and platinum plans.

The insurance exchanges are specifically for individuals who have no health insurance or purchase individual coverage; those who get insurance through their employer will be unaffected. According to the Kaiser Family Foundation, about 14 percent of the state -- 675,000 Alabamians -- lacked health insurance in 2011. Another 5 percent bought individual plans.

Blue Cross Blue Shield Alabama, which held 86 percent of the individual market in the state and 96 percent of the small group market in 2011, has filed to participate in the exchange, as have United Healthcare and Humana. HHS said Alabama consumers will have an average of seven plans to choose from.

The federal government will be running Alabama's health insurance exchange. Gov. Robert Bentley, who initially supported the state running its own health insurance exchange, announced last November he would not set one up.

In an interview in February, Bentley said he "saw an opportunity as a governor to put up roadblocks against a piece of legislation (the ACA) that I was very much against."

Bentley also has rejected an expansion of Medicaid offered to states under the Affordable Care Act.

"We are still hopeful Alabama will take full advantage of the reform and extend full coverage through Medicaid expansion," Carnes said. "As it is now, we're thrilled the marketplace is rolling out for moderate income folks, but it still leaves 350,000 Alabamians in a coverage gap, because they don't make enough to qualify for the marketplace."

Additional Facts

Health insurance exchange

Health insurance exchanges are marketplaces that will allow the uninsured to price and compare different insurance plans. The exchanges will begin offering insurance starting Oct. 1, with coverage starting Jan. 1, the same day Americans will be required to carry insurance. The exchanges offer subsidies for insurance to those making up to 400 percent of the federal poverty level.

A 2012 study by the Commonwealth Fund found the average Alabama health insurance plan cost about $402 a month for individuals and $1,079 a month for families. Rates will vary in the exchanges, depending on age and plan. HHS says a family of four making $50,000 would pay an average of $112 a month for the highest-deductible, lowest-premium plan. A more expensive plan would cost the same family an average of $757 a month.

A 27-year-old making $25,000 a year would pay $98 a month after tax credits for the lowest-cost single plan, and $209 a month for a more expensive plan.

The Affordable Care Act also requires insurers to offer the follow benefits:

1. Ambulatory services

2. Prescription Drugs

3. Emergency Care

4. Mental Health services

5. Hospitalization

6. Rehabilitative and Habilitative Services

7. Preventive & Wellness services

8. Lab services

9. Pediatric care

10. Maternity & newborn care

Sources: HHS; AARP

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