On Friday, the Indiana Department of Insurance announced that initial rates submitted by individual health plan providers for the state’s Obamacare insurance marketplace (which will be operated by the federal government) would cost 72 percent more than currently available plans, or about $570 per month. But that’s a very disingenuous figure, and a closer look at the real numbers indicate that many Hoosiers will be paying significantly less than what state officials are implying.
Gov. Mike Pence’s (R) administration was quick to use the figures to criticize the health law. In an interview with the Indy Star, Logan Harrison, the chief deputy commissioner of the Indiana Department of Insurance, said, “This new data regrettably confirms the negative impact of the Affordable Care Act on the insurance market in Indiana.”
The problem is, the Department of Insurance didn’t really release “data” in the plural — it released a single data point. The $570 per month figure is the average of all of the submitted rates, including cheaper plans with less benefits (so-called “Bronze” and “Silver” level plans) as well as the more generous and expensive “Gold” and “Platinum” level plans. That’s like saying the average cost of a car in an Indiana dealership is $100,000 because it sells $20,000 Fords, $60,000 BMWs, and $220,000 Lamborghinis — technically true, but highly misleading.
But the Washington Post’s Sarah Kliff was able to get her hands on some of the actual submitted rates, including several insurers’ projections for what their bare-bones Bronze plans and mid-level Silver plans will cost — and they paint a very different picture from the Indiana government’s implication of massive hikes. Kliff found that Anthem, one of Indiana’s largest insurers, expects that a “47-year-old male who does not smoke would be charged, on average, $307 per month” for its Bronze-level plan, and that “[s]ample plans from another plan, MDWise, predict a 47-year-old man will be charged $294 and $391 for a bronze and silver plan, respectively.” Those plans will be far more robust than current ones available in Indiana, since the health law requires insurers to offer coverage for a range of ten “essential health benefits” — including maternal care, prescription drug services, and mental health care — that individual plans usually don’t.
And those numbers don’t even take Obamacare’s federal insurance subsidies into account. With those subsidies, low-income Indiana families would have to pay even less. For example, the Kaiser Family Foundation’s insurance subsidy calculator shows that a 47-year old, non-smoking male with a wife and household income of $35,000 would get about 70 percent of his premium for a Bronze-level plan covered by the federal government.
Kliff also makes the important point that past evidence in Massachusetts, where the law that inspired Obamacare has been in place for seven years, shows that the vast majority of consumers will opt for these cheaper, lower-benefit plans. There, almost half of all consumer opted for a bare-bones plan, another 35 percent bought a mid-level plan, and the rest bought other plans. Insurers in Indiana expect a similar breakdown to happen in 2014.
Until Indiana’s Department of Insurance releases the full list of submitted rates — instead of just one skewed figure — and specifies which level plans those rates are for, it’s impossible to know exactly what the insurance market in Indiana will look like under Obamacare. But other states that have released detailed information for their Bronze and Silver plans have found lower-than-expected prices for more robust insurance.