Add Colorado and Montana to the list of states reporting affordable insurance premiums under Obamacare. The states’ individual policies under the health law will offer more robust coverage than current plans do, and most new enrollees will receive government subsidies to help them buy insurance — a fact that much of the coverage on Obamacare neglects to mention.
Colorado’s insurance marketplace will offer 150 individual policies from 13 insurers whose rates will vary based on a person’s age, geographic location, and whether or not they smoke. Premiums for a 27-year-old non-smoker will be about $135 per month for a bare-bones “catastrophic” plan. The most generous policies preferred by the medically needy and older Americans can range up to $1,000 per month depending on the previously mentioned factors and the cheapest “Bronze-level” plan for a 40-year-old non-smoker will run about $177 per month — cheaper than the current Colorado individual policy average of $200 per month.
It’s critical to note that these top line numbers don’t take Obamacare’s government insurance subsidies into account. The Congressional Budget Office estimates that 87 percent of Americans who enroll in the health law’s marketplaces in 2014 will receive at least some government assistance to buy their coverage. For Americans who make less money, such as young people, the subsidies will be more generous. That means the 27-year-old non-smoker used an example above could have as much as half of his or her $135 premium covered by the government if they make around $16,000 per year.
Nonetheless, some media outlets have failed to emphasize how those subsidies ultimately determine exactly how much insurance will cost under Obamacare. For instance, The Hill ran an article entitled “Premiums to rise for cheapest health plans in Colorado,” which claimed that “[y]oung people in Colorado will pay… 140 percent more than the cheapest policy on the market today” to buy a bare-bones catastrophic plan under the health law. The piece was quickly circulated by Obamacare opponents as proof that insurance rates will increase because of reform.
But as Colorado’s Deputy Insurance Commissioner Peg Brown explained, that’s not the whole story. The “cheapest policy on the market today” is nothing like the plans that will be available under Obamacare, which must offer a broader benefit package than many individual policies currently do. “It’s important to note that these are new plans, and developed for new requirements in 2014. Consequently, any comparison to past or current plans would not be an apples-to-apples comparison,” said Brown.
Montana’s newly-released rates are equally encouraging. A 25-year-old who wants to buy the cheapest available plan would only pay about $155 per month. A better plan with a lower deductible of $500 would run $265 per month before subsidies, and policies for middle-aged Americans will range from $360 to $660 per month before subsidies — which the vast majority of Montanans will qualify for.
“I’m pleasantly surprised by these prices and pleased that Montanans who have survived cancer and other serious illnesses will no longer be denied health insurance or priced out of the market,” said Montana State Auditor Monica Lindeen in a statement. “Not everything about Obamacare is perfect, but these market reforms were a long time coming.”