Under Obamacare, Montana Residents Will Get Better Benefits For Less Money Than They’re Paying Now

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Individual and small group health plans sold on Montana’s Obamacare marketplace in 2014 will be cheaper than what current plans would have cost without the health law — even though the new marketplace plans will offer significantly better benefits than the status quo, according to a new Montana actuary report.

Without the health law, insurance officials predicted the average premium in 2014 to rise by 10 percent to $290, explained Lucas Hamilton, communications director for Montana Insurance Commissioner Monica Lindeen, in a phone interview with ThinkProgress. Instead, the average cost for an individual plan will be $273 — about five percent lower than it would have been without the health law’s marketplace.

That’s despite the fact that insurance sold on the marketplaces will have to cover a range of ten “essential health benefits,” including prescription drug and mental health services, that skimpy individual plans almost never cover. The numbers sharply contradict conservative claims that Obamacare will raise premiums by requiring plans to offer more robust coverage.

To the contrary, a 25-year-old can purchase a bare-bones “Bronze” level individual plan for $141 per month on Montana’s marketplace, and a more generous “Gold” plan for about $300 per month. Older Americans can buy plans for a slightly higher premium, between $313 and $664.

And those numbers don’t even take the health law’s federal insurance subsidies into account, meaning that poorer Montanans will be able to buy coverage at cheaper — and for many low-income Americans, much cheaper — prices. Between 229,000 and 278,000 Montanans are expected to buy coverage through the marketplace, with over 180,000 of them receiving federal subsidies.

Montana officials still have to pore over the new data before determining the exact reason that the rates are so low despite higher-quality insurance. But Hamilton surmises that some possible reasons include insurers’ desire to offer customers competitive rates on their products, especially considering the large number of Americans expected to enter the individual market. That echoes the experience of states like Oregon, where several private insurers actually requested to lower the rates they’d submitted for the state’s marketplace out of fear that their prices were too high to attract consumers.