Under Obamacare health insurance premiums are set for a huge increase in Ohio in 2014, but Anthem Blue Cross currently provides a way to at least delay the impact and provide you with an option if the exchange rates prove to be too costly for you and your family. This article briefly examines why rates are increasing and how you can play a safety with Obamacare.
If you buy your own health insurance in the individual market you may be in for quite a surprise when you see your premiums next year. According to the Ohio Department of Insurance in a June 6th, 2013 report stating ”Health insurance costs to increase significantly under affordable care act,” premiums are scheduled to rise by an average of 88%.
Under the Affordable Care Act, Obamacare, which takes effect January 1, 2014, if you earn less than 400% of the federal poverty level and you purchase your plan through a public exchange you may be eligible for a government subsidy to help offset a large portion of that cost, but people who earn in excess of that amount will be looking at huge rate increases. The Kaiser Foundation has created an Obamacare Subsidy Calculator if you would like to see if you will qualify and what your health insurance premiums may look like next year.
Even if you do qualify for a subsidy, the amount you will have to pay may still be more than what you can purchase insurance for now, especially if you are a single male or a family who does not want maternity coverage.
Let’s look at some of the driving forces behind the rate increases.
Essential Health Benefits
Beginning in 2014 all health insurance will have to provide coverage which includes ten categories called Essential Health Benefits on which there will be no annual or lifetime limits. Some of these EHBs are not on your plan currently, some may be benefits you may not want, but unless you have a grandfathered health plan they are going to be included in your insurance and you will be paying for them either in January or at your next renewal date.
Metal Level Plans
Obamacare calls for four levels of health insurance plans which are being referred to as Metal Levels: Bronze, Silver, Gold and Platinum. These will differ by actuarial levels, which means that the Bronze (lower cost) plans will pay approximately 60% of your health costs, Silver 70%, Gold 80% and the highest cost Platinum will pay 90%. The plans will be from the private insurance companies you are familiar with, such as Anthem Blue Cross, and will have the familiar copays, deductibles and coinsurances, and no matter which plan you select there will be maximum out-of-pocket limits so an individual will not pay more than $6,300 and a family will not pay more than $12,700. These out-of-pocket expenses are, of course, in addition to the premiums.
No Medical Underwriting
Individual health insurance plans in Ohio are currently medically underwritten, which means someone may be accepted into a plan either as applied for or at a higher premium or can be denied coverage. Starting next year there will be no more medical underwriting, everyone the same age living in the same geographical area will pay the same premium. This averaging of premiums may be good news for people who cannot qualify under current underwriting, but will mean huge rate increases to those who do. Basically, the healthier you are, the higher potential rate increase you will see.
How to Play a Safety with Obamacare
If you are able to get through medical underwriting with Anthem, the plan you select now will remain in force until the annual renewal in 2014. You can apply for a low cost plan that does not include all of the EHBs or conform to the metal levels and save a lot of money well into 2014. And who knows what will happen to the law at that point; playing a safety gives you the option to sit on the sidelines and watch.
Click here to run some no-obligation quotes with Anthem Blue Cross. If you see something you like you can apply online, nobody will call you and you can even elect to be billed so you don’t have to pay up front. This way you can see if you are accepted and decide at that point if you would like to proceed with playing a safety.