WASHINGTON — As state health exchanges release initial estimates of insurance premiums, experts say state and regional factors will affect how much a consumer pays for coverage starting in January.
There is no clear-cut standard of comparison since factors such as state regulations, insurer participation in federal and state exchanges, and the amount of baseline benefits offered, all affect premium rates.
“With all the back and forth it can be very hard to identify what is actually going on,” said Linda Blumberg, who focuses on health insurance at the Urban Institute, a nonpartisan think tank.
Under the Affordable Care Act, Americans must have insurance coverage starting in 2014. The state exchanges create a marketplace where individuals not covered by employer plans can shop for coverage.
Within a state, premiums will differ by age, smoking status, family size, geographic location, and scope of coverage.
At least 16 states and the District of Columbia have released rate estimates, and the majority of those states are reporting lower than expected costs.
In Maryland costs are expected to be 33 percent lower than early estimates, with coverage rates for a 21-year-old non-smoker as low as $93 a month, according to the state insurance commissioner.
In July, New York announced that consumers buying individual plans could see a 50 percent decrease in coverage costs.
Next door in Connecticut, individual rates could drop by an average of 36 percent according to one insurer, HealthCT.
Since premiums do not take into account out-of-pocket costs, Blumberg says including these expenses would provide a better gauge of what insurance costs will actually look like.
“It’s not just the premiums that people should be thinking about,” Blumberg said. “They should be thinking of the out-of-pocket requirements as well.”
Under the new Affordable Care law, Americans who buy insurance on state exchanges can chose among four levels of plans: bronze, silver, gold and platinum. Bronze offers the lowest amounts of cost and coverage, but the highest out-of-pocket costs. The more elite gold and platinum plans cover more benefits but at higher premiums.
Not all states are reporting lower insurance costs. In Florida the insurance commissioner said individual rates could increase by up to 40 percent.
In Indiana, Republican Gov. Mike Pence, who opposed the health care law while he was in Congress, announced initial statistics showing that rates may be 72 percent higher than current insurance plans.
But these rates are still not set in stone. Experts say that competition among insurers may lead to fluctuations in costs.
A study released last month by the U.S. Department of Health and Human Services found that premium estimates of individual plans provided by 11 states were on average 18 percent lower than HHS’ initial estimates, which were based on figures from the Congressional Budget Office.
The agency studied rates in California, Colorado, the District of Columbia, New Mexico, New York, Ohio, Oregon, Rhode Island, Vermont, Virginia and Washington.
“Today’s report shows that the Affordable Care Act is working to increase transparency and competition among health insurance plans and drive premiums down,” HHS Secretary Kathleen Sebelius said in the report. “The reforms in the health care law ensure consumers will have access to better coverage at a lower cost in 2014.”
While this indicates lower costs in the beginning, some experts believe long-term costs will rise. Tom Miller, who studies health care policy and regulation at the American Enterprise Institute, says that insurers may raise premiums after establishing a loyal customer base.
“You can suppress rates for a year or two, but if you look at the long-run equilibrium they might change,” Miller said.