Premiums And Cost Sharing Across Health Insurance Marketplaces

A report published by the Robert Wood Johnson Foundation (RWJF), titled Looking Beyond Technical Glitches: A Preliminary Analysis of Premiums and Cost Sharing in the New Health Insurance Marketplaces, examined premiums, deductibles, copayments and coinsurance amounts for primary care physicians (PCPs) and specialist visits. RWJF announced that this is the first of a series of reports it intends to publish on the health insurance plans that are offered in all state marketplaces, including the District of Columbia.

Background. As its benchmark for the report, RWJF chose the second-lowest cost silver plan (SLCSP) in an individual’s rating area to determine the amount of an individual’s premium tax credit. Under the Patient Protection and Affordable Care Act (ACA), federal subsidies in the form of tax credits could be used to offset premium costs for persons with incomes up to 400 percent of the federal poverty level (FPL). The report used premium information for a hypothetical 27-year old individual, based on data published by the Centers for Medicare and Medicaid Services (CMS) for plans offered by federally facilitated exchanges and state based exchanges. The states included in the report were California, Colorado, Connecticut, Kentucky, Massachusetts, Mississippi, Montana, New Hampshire, New York, Nevada, Rhode Island, Vermont, and Washington.

Results of analysis. The report found that SLCSP premiums and deductibles varied widely between the 15 states. For an SLCSP, the highest premium was $439 (New York), the lowest premium was $127 (Minnesota), and the average premium between the states was $266. In addition, deductibles were either integrated or separated. An integrated deductible meant medical and prescription drug expenses were counted towards a single deductible, whereas, separate deductibles meant medical service expenses were counted towards one deductible amount, and prescription drug expenses were counted towards another. The report found that the highest integrated deductible was $4,061 (Minnesota), the lowest was $2,000 (Massachusetts), and the average was $2,763. For separate deductibles, the average medical deductible was $2,770 and the average prescription drug deductible was $933.

The report also examined cost share amounts and found that copayments for a PCP visit ranged from $0 to $45, with an average of $30; and coinsurance ranged from 0 percent to 40 percent with an average of 15 percent. Copayments for specialist visits ranged from $0 to $80 with an average of $47. The report noted that some carriers took different approaches when it came to cost sharing for physician visits. Further, individuals with incomes up to 250 percent of the FPL may receive cost sharing reductions (CSR), to lower their out-of-pocket expenses. The report noted for individuals with lower incomes, the CSRs may significantly lower cost sharing amounts by increasing the plan’s actuarial value; however, the cost sharing amounts given in this report are not representative of the actual amount an eligible individual may pay after CSRs are applied. Finally, the report emphasized that premiums alone do not represent total out-of-pocket expenses an individual may have to pay when purchasing insurance coverage.

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