The exchange rates for NY have been released, and all the press surrounds the magical 50% drop. Before you order a cake, lets be clear about this: Individual rates have always been astronomical in NY, even with the government subsidizing those rates. Of the 2.5 million uninsured in NY, only 17,000 people have paid the incredibly high price for individual coverage. Face it, when you cannot get insurance anywhere else, and they have to take you and cover what is wrong with you (NY made that transition in 1993), the rates are going to be high. Rates of $1000+ a month were typical, and who pays that? Not someone healthy and just being cautious – only those that were sick enough to pay those amounts and STILL benefit from the policy would pay that premium. So over the years, rates crept up to the $1500-$2000 range.
Note that NY has had Guaranteed Issue, no pre-existing conditions and pure community rating since 1993 – all components of ObamaCare. Will the same thing happen going forward in all states? most likely. History is a great teacher.
So reducing these rates by 50% under the “Affordable Care Act” doesn’t necessarily make them affordable. Looking at the rate charts, a New York City resident looking for a rich plan can get a Platinum-level plan for between $443 and $965.24. To some that is affordable, but not to most of those looking for individual coverage. A much bigger question remains – What am I getting for my money?” What benefits will I receive and what network will I have to use? The details, other than the big announcement of a 50% decrease – a “very sketchy.”
California achieved its “reduced rates” with dramatically reduced network sizes – limiting hospital and doctors choice severely.
More important to those qualifying for the exchanges is the “Silver Plan” because that’s the plan they have to take to get a subsidy. Their “premiums” will be capped at 9.5% of their income, so the actual premium only matters to the taxpayers funding this. As an example, someone with a $25,000 income, would only pay $197.92 for the most expensive plan on the exchange, which “lists” for $597.44.
Stay Tuned. Alot more to come before the picture becomes fully developed.