Everyone’s expecting them to go up. But what if they go down? Many families could be worse off.
If a family of four headed by two adults in their mid-30s is making $59,625 per year, then the ObamaCare subsidies will make it so the second-lowest cost silver plan costs no more than 8.15 percent of its income, or $4,860.
In Marion County, the two cheapest silver plans are sold by Anthem Blue Cross and Blue Shield. The cheapest plan costs $7,700 a year and the second-cheapest costs $8,040.
To make that second-cheapest plan cost only $4,860, ObamaCare applies a tax credit of $3,180. So that is the subsidy available for any family of four making $59,625 — NO MATTER WHICH HEALTH PLAN that family purchases in the ObamaCare exchange. It can be a bronze plan or a gold plan. It can be more or less expensive. No matter, that family will receive a subsidy equal to $3,180.
But what happens if another insurer — such as UnitedHealthcare, which sat on the sidelines this year, or MDwise Inc., offers a silver plan in 2015 that’s just a little bit cheaper than the cheapest Anthem plan, say, for $7,500 per year?
In that situation, then Anthem’s cheapest silver plan would become the benchmark for the subsidies. To make a $7,700 plan only cost a family of four $4,860, the tax subsidies would need to be only $2,840 per year — $340 less than they were before.
Now, the family of four could shift plans to that cheaper Anthem plan, and pay no more in premiums.
But if that family doesn’t want to change health plans — and with the narrow networks in these exchange plans greatly restricting patients’ choice of doctors and hospitals, that’s a very real possibility — the family will have to cover the $340 themselves.
That’s an extra $28 a month, or 7 percent more — for exactly the same coverage.
So, the key to affordability next year in the ObamaCare exchanges — at least for those receiving subsidies — is whether the insurers try to undercut each other on price in the silver category.
Such competition will lead to more choices and better prices — but it will either require consumers to switch plans or pay higher premiums. (More)