Obamacare prices roll in lower than forecast

In California, the premiums submitted by insurance companies are surprisingly competitive.

By Kim Peterson May 28, 2013 1:43PM
Image: Medical doctor (© Digital Vision/Getty Images)Plenty of Americans take a dim view of Obamacare, even though the Affordable Care Act doesn't fully kick in until next year. It will be expensive. It will be a bureaucratic nightmare. It will complicate a health care system already in disarray.

All of those things could be true, in some states more than others. But in one key state, the costs are coming in surprisingly low.

California has announced the premiums for its residents under what it calls Covered California, a health benefit exchange that is developing the state's insurance marketplace. Covered California has picked 13 health insurance plans to start with next year and has put together a booklet (.pdf form) summarizing them.

There are four categories of coverage -- which the state has named bronze, silver, gold and platinum -- and the rates for each vary by region and residents' ages. For silver, the second-cheapest plan, the average monthly premium ranges from $304 to $335. The booklet has more detailed information.

These costs aren't for Californians who already get health insurance from their employers or Medicare or Medicaid. Rather, they would be for residents who don't have insurance or who buy it on their own.

And while they still must get final approval, many observers who have looked over them say they aren't bad. They are certainly less than what people would pay today for the same level of coverage, Jonathan Cohn writes at the New Republic. Someone making $29,000 a year would pay about $2,400 a year in premiums, Cohn writes. Someone making $17,000 a year would pay about $700 a year.

A huge unanswered question here is what happens to the premiums in subsequent years. Companies are most likely low-balling prices to grab market share. What happens in the future?

Another question is what will happen in other states that weren't so willing to embrace Obamacare. How will their premiums stack up? Some states are rushing to meet early deadlines set by the law and "are barely going to make it," the former director of the Massachusetts exchange told Businessweek.

There will be plenty of horror stories ahead. But for now, the Obama administration can look at California's numbers as one bright spot in a deluge of negativity about the law. A year from now, we'll have a much clearer sense of costs and what may or may not be working.

More on moneyNOW



547Comments
May 28, 2013 2:20PM
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No, it's coming in surprisingly low for the poor... the rest of us get the joy of seeing massive hikes in order to cover them!  Nothing like getting punished, again, for being middle class.
May 28, 2013 3:01PM
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Why are premiums being adjusted based on income level?  Oh that's right, they're not!  The total premium amount is the same, it's just that a lower income person gets more of their premium subsidized by the gov. 

More dependency, more entitlement programs, more wealth redistribution and more class warfare is NOT the answer!
May 28, 2013 2:49PM
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Good Grief that is an outrageous amount to pay only earning $29,000 a year and living in California. Poverty level for cost of living in CA.  Great job California! You voted Obama in twice. That is why your state is bankrupt!
May 28, 2013 2:21PM
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$2,400/year for an earner of $29,000?  That's 8.275% of their yearly pay: pre tax.  Take out the 20% in federal taxes and the 6% in California income taxes and you are forcing them to pay 11.2% of their take home pay .  I'm glad that it'll be so cheap for them.

May 28, 2013 4:01PM
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California?  Seriously, California is your example of economic stability?  California is a gleaming example of failed socialist policies.  They are bankrupt, and digging themselves deeper.  And we are supposed to be good little ObamaZombies and cheer for socialized health care?  Come on, MSN, at least tell the truth and stop trying to put lipstick on that pig we call ObamaCare.
May 28, 2013 2:06PM
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These prices are only that low because the government subsidies are already deducted. So the actual policies are actually much higher than stated. And those subsidies are YOUR tax dollars, they don't come from nowhere. It's the Demagogic Party slogan: "Your chickens in somebody else's pot".
May 28, 2013 2:11PM
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Look at the other 3 States that have already published obamacare prices.   Those 3 States have large increases in premiums.
May 28, 2013 2:34PM
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Let me see. I live in Texas (thank god) and I'm a healthy (and responsible individual); 49 yrs old non-smoker and I pay $250.00 per month with a $3500.00 deductible. I also make well into the six figures. Compare that to the example of the guy, 29 years old paying $2400.00 per year. Yeah, what a bargain for that dude. Only the Totalitarian New Republic could write something like that's affordable. 
May 28, 2013 2:35PM
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$2,400 a year in costs for someone making $29,000 a year is affordable?  Thats not what you take home either so figure $29,000 yearly income bringing home $23,000 and paying $2,400 in health care.  Where in California can this person live?
May 28, 2013 3:40PM
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What a poorly written article. It's almost as dumb as Obamacare itself, just much shorter. Where are the details? Family plan, 2 person , or single? Whats covered? Whats the difference between Bronze, Silver, Gold, and Platinum other than the costs. Just another dumb MSN article.
May 28, 2013 2:45PM
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Someone making $29,000 a year would pay about $2,400 a year in premiums, Cohn writes. Someone making $17,000 a year would pay about $700 a year.--- hum,  none of this includes what is covered, co-pays, deductible,  drug coverage and max out of pocket.
Lots of unanswered questions, and what are they really getting for coverage?
May 28, 2013 3:45PM
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... but the poor will pay nothing, you know it and i know it. So what the hell has changed. I work with a lot of people who think it will be free to them, and they are probably right. I had a group tell me the other day that "universal" means "free". They really beleive that. Just how are all these folks setting around on the curb going to pay when they don't have a job. Answer that one mr democrat. The good ole middle class will, thats who.

May 28, 2013 3:00PM
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I guess - You get what you pay for.......Errrrrrrrrr, unless you can get someone else to pay for it for you! (as was so eloquently exhibited in this literary work of democratic propoganda)

May 28, 2013 2:48PM
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13,000 a year net in Colorado qualifies a person for Medicaid. What does this law really do in the long run but make it all more of a mess. 
May 28, 2013 2:23PM
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 For silver, the second-cheapest plan, the average monthly premium ranges from $304 to $335. The booklet has more .--- Are those family plans? Anthem now has a 200 dollar a month, 7500 max out of pocket individual plan. I am not sure how all of this works, do the people have to get a blood draw and what if they have a history of health issues, is it still the same premium?
The article is really not very in-depth... 
May 28, 2013 2:45PM
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$2400 for someone earning $29,000 a year! That is poverty level for cost of living in California. That is outrageous amount for that income. Congrats California you voted Obama in twice!  
What does someone earning $50,000 have to pay? 

Good Grief!
May 28, 2013 3:08PM
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What are they gonna do with people that won't pay?  Garnish their wages or their income tax returns?  Oops there goes the Flat Screen TV and Cellular phone purchases at tax time

May 28, 2013 2:18PM
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I want all American's to be able to afford healthcare as a national goal. My issue is that this is just another layer of overhead and really does not add value nor does it solve the over all cost that is out of control. By the way, what are the deductibles and max out of pocket on these policies?
May 28, 2013 2:46PM
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I also thought the law said the cap the individual would have to pay was 8% of their net income.
May 28, 2013 2:17PM
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Eric---YA. YA.  There are many subsidies that are from the Gov.. Many people of ALL political parties get them just in different forms. Hey, the Department of Defense gives it's employee's childcare subsidies.
Who's dollars are that now?
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