HHS SAYS NEW HEALTH INSURANCE MARKET PLACE TO HAVE LOWER THAN EXPECTED PREMIUMS

FROM:  U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Significant choice and lower than expected premiums available in the new Health Insurance Marketplace

A new report released by the Department of Health and Human Services (HHS) finds that in state after state, consumers will see increased competition in the Health Insurance Marketplace, leading to new and affordable choices for consumers.  According to the report, consumers will be able to choose from an average of 53 health plans in the Marketplace, and the vast majority of consumers will have a choice of at least two different health insurance companies - usually more.  Premiums nationwide will also be around 16 percent lower than originally expected – with about 95 percent of eligible uninsured live in states with lower than expected premiums – before taking into account financial assistance.

“We are excited to see that rates in the Marketplace are even lower than originally projected,” said Secretary Sebelius.  “In the past, consumers were too often denied or priced-out of quality health insurance options, but thanks to the Affordable Care Act consumers will be able to choose from a number of new coverage options at a price that is affordable.”
In less than a week, the new Marketplace will be open for business where millions of Americans can shop for and purchase health insurance coverage in one place.  Consumers will be able to find out whether they qualify for premium assistance and compare plans side-by-side based on pricing, quality and benefits.  No one can be denied coverage because of a preexisting condition.  October 1 marks the beginning of a six-month long open enrollment period that runs through March 2014.  Coverage begins as early as January 1, or in as little as 100 days from today.

Today’s report finds that individuals in the 36 states where HHS will fully or partly run the Marketplace will have an average of 53 qualified health plan choices.  Plans in the Marketplace will be categorized as either “gold,” “silver,” or “bronze,” depending on the share of costs covered.  Young adults will also have the option of purchasing a “catastrophic” plan, increasing their number of choices to 57 on average. About 95 percent of consumers will have a choice of two or more health insurance issuers, often many more.  About 1 in 4 of these insurance companies is offering health plans in the individual market for the first time in 2014, a sign of healthy competition.

The report also gives an overview of pricing and the number of coverage options across the nation.  It finds that the average premium nationally for the second lowest cost silver plan will be $328 before tax credits, or 16 percent below projections based off of Congressional Budget Office estimates.  About 95 percent of uninsured people eligible for the Marketplace live in a state where their average premium is lower than projections.  And states with the lowest premiums have more than twice the number of insurance companies offering plans than states with the highest premiums.

Premium and plan options are broken down by state where information is available. For example, the report shows that a 27-year old living in Dallas who makes $25,000 per year will pay $74 per month for the lowest cost bronze plan and $139 per month for the lowest cost silver plan, taking into account tax credits.  And he or she will be able to choose from among 43 qualified health plans. For a family of four in Dallas with an income of $50,000 per year, the lowest bronze plan would cost only $26 per month, taking into account tax credits. The majority (around 6 out of 10) of the people uninsured today will be able to find coverage for $100 or less per month in the Marketplace, taking into account premium tax credits and Medicaid coverage.

Consumers can get help finding Marketplace coverage through a number of different resources.  They can get more information through HealthCare.gov, or cuidadodesalud.gov.  Consumers can participate in online web chats or call 1-800-318-2596 toll free (TTY: 1-855-889-4325) to speak with trained customer service representatives, with translation services available in 150 languages.  Community health centers, Navigators and other assisters are available in local communities to provide in-person help with coverage choices.  Local libraries will help consumers learn about their options and hundreds of Champions for Coverage, which are public and private organizations all across the country, are helping people learn about their options and enroll in affordable coverage.

HHS CLAIMS AFFORDABLE CARE ACT SAVES CONSUMERS $1.2 BILLION

FROM:  U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Health care law saves consumers $1.2 billion nationwide

A new report released today by the Department of Health and Human Services (HHS) shows that 6.8 million consumers saved an estimated $1.2 billion on health insurance premiums in 2012, due to the “rate review” provision of the Affordable Care Act, which brought unprecedented accountability to slow the growth of health insurance premiums.  The Affordable Care Act, along with state efforts, continues to bring scrutiny to proposed health insurance rate increases and is saving consumers real money as a result.

“Thanks to the health care law, we are seeing that holding insurance companies accountable is leading to increased competition and saving billions of dollars for consumers across the country,” said Kathleen Sebelius, Secretary of HHS. “This type of competition and transparency will continue in the Health Insurance Marketplace, or Exchanges, where Americans will be able to shop for and compare plans side-by-side to find the one that fits their needs and budget.”

Beginning on Sept. 1, 2011, the federal rate review rules under the health care law were implemented. These rules ensure that, in every state, insurance companies are required to submit for review and justify any proposed health insurance premium increase of 10 percent or more.

To assist states in this effort, the Affordable Care Act provides states with Health Insurance Rate Review Grants to enhance their rate review programs and bring greater transparency to the process.  Forty-six states, the District of Columbia, and five territories have been awarded rate review grant funds to make the rate review process stronger and more transparent.

These provisions have put an end to the days when insurance companies could raise health insurance premiums by double digit percentages with little oversight.  Because of rate review, the report released today shows that consumers have saved approximately $1.2 billion over the past year in the individual and small group markets.

This initiative is one of many in the health care law aimed at saving money for consumers and specifically works in conjunction with the 80/20 rule, which requires insurance companies to spend at least 80 percent of premiums on health care or provide rebates to their customers, instead of overhead, administrative expenses. Thanks to the 80/20 rule, last year 77.8 million consumers saved an estimated $3.4 billion up front on their premiums as insurance companies operated more efficiently.  Insurance companies that did not meet the 80/20 rule provided nearly 8.5 million Americans with $500 million in rebates.