By Carol Ostrom
For some people, individual insurance plans offered through Washington’s new online exchange marketplace may cost more than those available now, but they will cover much more, state Insurance Commissioner Mike Kreidler said Thursday.
And although people in some counties will have limited choices, as they do now, in most counties the 31 new plans available from four companies will offer a wide range of premiums and cost-sharing options.
The plans, which are being made available under the federal Affordable Care Act (ACA), sometimes called Obamacare, take effect in 2014. The state Thursday disclosed details of the exchange plans, the centerpiece of the ACA.
Targeted groups are mostly people who don’t have health insurance through employers or who have no coverage at all. The law provides subsidies for those buying these plans whose incomes fall below certain levels.
By law, the plans under the exchange cover a wider range of benefits than most individual plans today, including things rarely covered now, such as prescription drugs, and maternity and newborn care.
Not all companies that applied to sell new individual insurance plans inside Washington’s online exchange marketplace will be able to do so, Kreidler said.
Five of the nine companies that applied were turned down because they weren’t able to guarantee access to doctors and hospitals, the insurance office said.
The insurance office also pared premiums overall by 1.8 percent, compared with what the companies originally requested, for a total savings of more than $10 million.
In King, Pierce and Snohomish counties, the companies with approved plans to be sold inside Washington’s Health Benefit Exchange are BridgeSpan Health Company (an affiliate of Cambia Health Solutions, the parent company of Regence BlueShield), Group Health Cooperative, Lifewise Health Plan of Washington and Premera Blue Cross.
Three of those — Group Health, Premera and Lifewise (a Premera subsidiary) — also have been approved to sell individual plans outside the exchange, while six other insurers also have proposed plans. The insurance commissioner has until the end of September to review those plans.
Plans sold outside the exchange must cover the same essential benefits and have the same rules under the federal law, but insurers would not have to set them up to conform to the exchange’s technology and payment system requirements, said Rich Roesler of the insurance office.
Premera spokeswoman Melanie Coon said selling plans outside the exchange allows the company to offer existing customers an easy transition and specific support.
“It’s about customer care,” she said. “We don’t want to dump them into the exchange — we don’t want to lose them.”
The subsidies set up by the federal law to help eligible people pay for premiums are available only in plans purchased through the exchange, which will open for enrollment Oct. 1.
Citizens and legal immigrants who make up to $45,960 and families of four making up to $94,200 a year may be eligible for subsidies, which are scaled by income so people don’t pay more than a certain percentage of their income.
New rules under the ACA also limit out-of-pocket costs in most plans to $6,350 for individuals and $12,700 for families, including deductibles but not premiums.
Plans can no longer have annual or lifetime coverage caps for essential health services.
People with very low incomes also may qualify for a cost-sharing subsidy to help them with deductibles, co-payment, coinsurance and other out-of-pocket costs.
How much people pay for insurance will depend on their age, where they live, whether or not they smoke, and the plan they select. All plans will be offered in at least three different levels of premium and cost-sharing, so consumers can compare.
The lower-level “bronze” plans approved by the insurance office have smaller premiums, but consumers will pay higher cost-sharing percentages. “Gold” plans have larger premiums but smaller cost-sharing requirements.
To illustrate, the insurance office looked at premiums for the lowest-priced plan to be sold inside the exchange at each of the three levels, before subsidies, for three different hypothetical shoppers.
For example, a single 40-year-old non-tobacco user in King County could pay premiums ranging from $213 a month to $351.
A 21-year-old single non-tobacco user could pay from $166 to $274, and a similar 60-year-old from $451 to $744 a month.
In some counties, those under age 30 also could choose a “catastrophic” limited-coverage plan offered by Group Health that would be less expensive than some others.
Earlier this year, the insurance office said it was surprised the proposed rates were not much higher than current similar plans even when the plans offered more extensive coverage.
Kreidler said he thinks many companies came in with reasonable prices because they wanted to attract healthy people, not just those who must buy because they have lots of health expenses.
But for people who have lost employer-sponsored coverage, said Dr. Roger Stark, health-care analyst at the Washington Policy Center, these new rates will be a substantial increase in expense. “Even with the subsidies, people are going to pay more,” he said.
For many people, the premium is what counts, and coverage limits aren’t always apparent — at least while they’re healthy.
Many people who have bought individual plans in the past don’t realize the extent of coverage gaps, Kreidler said. “Your financial exposure could be huge,” he said. “None of us is immune to bad luck, cancer or being in a major accident.”
Comparing existing individual plans and the new plans is difficult. Current plans often limit coverage in ways the new ones can’t, or require consumers to shoulder more of the costs.
So the actuaries in the insurance office took the most popular 2013 plans that were closest to the new ones offered on the exchange, and re-priced them as if they had the same level of coverage. They priced the plans for a 21-year-old, a 40-year-old and a 60-year-old.
In almost all case the old plans, if they had coverage that closely matched the plans approved Thursday, would be much more expensive.
The differences weren’t much for the 21-year-old, but rose with each age group and were most stark for the hypothetical 60-year-old.
For example, the 2013 Regence “Evolve Core 1500” plan with a $2,500 deductible, which covers 32,811 people currently, costs $488 for that 60-year-old.
But if that plan’s coverage were the same as the new “BridgeSpan Exchange Silver” with a $3,000 deductible, and a premium of $638, it would cost $887, the office’s actuaries concluded.
Kreidler said creating and reviewing completely new plans was a scramble for both the companies and his office. “It’s been a learning process with these very new plans, how best to meet the requirements of state and federal law … and price them appropriately.”
Some companies that wanted to offer plans in the exchange were new to the commercial market and weren’t able to guarantee access to certain providers and hospitals.
Kreidler said his office will work with them to help them get ready for plans in 2015.
The insurance office estimates that about 477,400 people in Washington will qualify for subsidies, and the state’s target for enrollment is about 130,000 people by Jan. 1.
People can buy insurance for 2014 until March 31, 2014. After that, if they aren’t insured or exempt under the federal rules, they must pay a penalty on their income tax.
The board of the Health Benefit Exchange must review the approved plans before they become final. A decision is expected Aug. 21.
This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.