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What Obamacare will really cost you

No matter what you think of Obamacare, it's happening. The real question for millions is how much it will cost them each month. Here are five of your biggest questions answered.

By Smart Spending Editor Aug 21, 2013 5:01PM
This post is by John F. Wasik of partner site The Fiscal Times.

MSN Money partnerWant to fully understand how the Affordable Care Act will play out? Good luck -- you might need a degree in complexity theory, or a crystal ball. The truth is it may be years before anyone can come to any reasonable conclusions.

Image: Surgeon with paperwork (© Creatas Images/JupiterImages Corporation)Still, this fall we’ll get some early indications, distracting noise or both. The linchpin of the massive health-reform program is how the state health insurance exchanges function. They’re supposed to be set up by October 1 and operational by January 1, although many states are recalcitrant or running behind. Several, from Alaska to Alabama, will require federal intervention.

With each state program featuring different insurers and benefit levels, it’s difficult to compare the plans. The only solid mandate is that everyone has to be accepted and no one can be discriminated against due to pre-existing conditions.

State plans also must cover a list of “essential benefits,” such as doctors' visits and ER visits; hospitalization; maternity and newborn care; mental health and substance abuse services; lab services; prescription drugs; chronic disease management; and preventive services.

But just how all of these services will be packaged and priced is another question altogether. Buyers will have a choice of tiered plans, from basic “bronze” to your high-end multi-service “platinum.” The premiums, of course, will vary for those plans, and will also be subject to reductions depending on subsidies for lower-income purchasers.

Here are five key questions when it comes to the pricing of Obamacare:

1. How much competition will there be?

The largest states will see robust competition with a number of insurers vying for market share. Smaller states, such as Vermont, will see less competition -- only two companies are in that market right now. A larger question is whether providers will be competitive. Hospital groups have been consolidating across the country. Does this mean insurers will have to raise their premiums in response to the hospital’s increased pricing power? It’s too soon to tell, but it’s a trend to watch.

2. Will premiums be affordable?
Few economists can answer this question. Although the ACA has set no guidelines on premiums, the theory behind the law is that a broad pool of policyholders and market competition will keep prices down. Early indications are mixed. Premium rates in California are averaging $331 per month right now, according to the Urban Institute; but in states like Indiana, Florida and Georgia, premiums are higher than the $359 average employee family premium for 2012 (as calculated by the Kaiser Family Foundation).

“Premiums are coming in lower than expected,” noted Linda Blumberg, an economist with the Urban Institute, speaking at a webinar sponsored by the Robert Wood Johnson Foundation on August 13. “We can expect competition to increase over the next two to three years.”


3. How will out-of-pocket limits impact policyholders?

Federal officials quietly gave insurers a break until 2015 on how much patients can spend on health care on their own. The limits were originally set at $6,350 per individual and $12,700 per family. Insurers can set their own limits or avoid them. For policy buyers, that’s a dangerous wild card, particularly for those who have serious medical conditions or pending surgeries. Will the lower-priced policies come with bargain-rate premiums, placing the risk of excessive out-of-pocket expenses squarely on the policy holder?

4. How will subsidies shape net premiums?
The ACA was to provide tax subsidies to lower-income buyers as part of its affordability promise. A recent study by the Kaiser Family Foundation found that about 48% of those purchasing plans will be eligible for a subsidy. The foundation estimates that break would amount to $5,548 per family, for a premium savings of 66%. So “sticker” prices reported in recent months don’t reflect what people will actually pay for the policies -- nor do they account for the number of people who will qualify for Medicaid.

5. How will states vet the plans?

Since the states are charged with setting up the exchanges (many have opposed doing so, for political reasons), all premium rates and plans are subject to review by state insurance regulators. These officials also have the power to reject rates if they’re too high. Yet how much sway these watchdogs have will vary from state to state, with some taking a passive role.


Despite all the news on initial premium rates, the truth is it’s too early to conclude whether the ACA can deliver affordable insurance to more than 30 million Americans.

“We won’t be able to judge until four or five years out,” notes Uwe Reinhardt, a respected health care economist at Princeton. “It’s a living thing.”

More from The Fiscal Times:

315Comments
Aug 21, 2013 8:28PM
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I cannot help but laugh at those that thought Obama was going to give them "free" healthcare.
Aug 21, 2013 7:53PM
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Affordable insurance at about $300 to $350 a month on minumum wage. Heck i will be sleeping in my car. At least until i loose it because of not being able to afford car insurance, Thanks Obama for helping me get free healthcare.

Aug 21, 2013 7:19PM
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F YOU MSN AND YOU BIAS PROGRESSIVE OBAMA PUSHING MEDIA! YOU KNEW THIS WHEN

HE WAS TRYING TO SNEAK THIS THING WITH PELOSI IN THE MIDDLE OF THE NIGHT WITH

OUT READING IT! YOU MOCKED AND LAUGHED AT FOX NEWS AND OTHERS SAYING IT WAS

A WAY TO SINGLE PAYER AND WOULD SKYROCKET RATES AND CUT SERVICES AND IT

DOES HAVE GOVT RUN DEATH PANELS WHO WILL BE DECIDING OUR HEALTHCARE NOT

OUR DOCTORS AND WE CAN'T KEEP OUR DOCTORS! IT WAS ALL A LIE! WHY NOT CALL OUT

OBAMA NOW ON THIS??? WHERE'S THE FING MEDIA WHEN THEY GET UP AND STILL LIE

ABOUT THIS GREAT HEALTHCARE THAT THE CORRUPT IRS IS GOING TO BE IN CHARGE!!!

YOU ARE FING ANTI AMERICAN SOBS AND SHOULD BE PUT OUT OF BUSINESS! WHY DON'T

YOU MUTHA ****ERS DO SOMETHING TO HELP STOP THIS OBAMINATION? MAYBE IF YOU

WHO HELP HIM GET AWAY WITH THIS FINALLY DID SOME REAL REPORTING AND HELP

EXPOSE OBAMA WHERE HE'D HAVE NO WHERE TO HIDE YOU'D EARN SOME RESPECT!

I CAN TELL CHRISSY FAG MATTHEWS AND MADDCOW AND PMSNBC NEVER WILL!

Aug 21, 2013 8:04PM
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Who are they kidding ? With no limit of liability for the insurance companies , and they have to insure everybody regardless of pre-existing conditions , there is NO WAY premiums are not going to rise ! Ours started going up almost immediately when Obamacare passed . Anybody who says it's not going up is either clueless or on the Obama payroll.
Aug 21, 2013 7:49PM
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This is going to turn out to be an absolute, unmitigated disaster...and Obumbler will get all the blame. You do remember that the Republicans were totally locked of the negotiations and meetings that led to the formation of this albatross. .
Aug 21, 2013 8:20PM
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If it is so wonderful why does odummer and his family not forced to have it? Why is the Senate and Congress exempt? They are all crooks, wish they could be fired and get people who care about this country and its people.
Aug 21, 2013 7:32PM
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Just know, that whatever luxuries you have now, KISS THEM GOODBYE!!!!!  Thinking of buying a car and having a car payment?  THINK AGAIN!!!  All you $$$$ will now go to a high premium for health insurance that's not worth it's weight in gold!  See, they kept talking about this pool, like the more people, the better the price. But if you look at premiums from just yesterday, they are UP 4% from this time last year and UP 89% from 10 years ago. It's not gonna make a bit of difference how many people are in a pool. These insurance companies are not in the business to loss money, but to make money. And from this article, they have NOT put a cap on premiums. A family of 4 can see a premium of anywhere from $400 - $800 a month, depending if you want a deductible or not. Do we see another recession on the horizon? They really NEED to make this optional for people and their families and stop handing free medical insurance (like medi-cal) out like it's candy The middle class, once again is going to suffer!!!
Aug 21, 2013 7:52PM
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In California, for folks in their 50s earning more than $46K per year, the premiums will be $600 per month, with minimum out of pocket maximum of $6500. This is considerably higher than insurance available prior to Obamacare. Of course, Obamacare coverage includes more bells & whistles, but that comes at a high cost. Folks like me would prefer to be able to buy "catastrophic" coverage with low premiums and higher deductibles. Instead, we're forced to purchase "Cadillac" plans - high premiums and high deductibles. This is a step backwards forwards "affordable" care. 
Aug 21, 2013 8:16PM
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repeal this obomination.

all of you who have supported this moronic legislation need to now be the ones who have  to pay.  not those of us who have fought it.  Libtards

Aug 21, 2013 10:03PM
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The fact that we are still discussing This socialized program tells me that Americans just don't get it. This country is headed toward a serious crash. I am completely at a loss for words, sitting back and letting Barack Hussein Obama destroy our economy is beyond belief. The greatest power on earth now run by fools.
Aug 21, 2013 9:09PM
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The "Real" cost of Obamacare.....Your Life.

Aug 21, 2013 8:23PM
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this is incredible stupidity on the part of Obama and the government he pursueded to vote this into law....it is NOT going to help the lower income families it was aimed at, it IS going to raise insurance rates for EVERYONE, while making the deductibles so high as to make the insurance unusable...and it is not even available to the lowest of incomes.....I DONT QUALIFY! I DONT MAKE ENUF MONEY TO QUALIFY FOR OBAMACARE!!! at 12K a year, I barely survive as it is!! I cant get Medicaid, I don't qualify there either, there is NO ADULT MEDICAID IN TEXAS!! what about people like me mr. Obama? why do you insist that this plan is good for America, when the lawmakers in Washington don't have to use it? what kind of deal is that? why are they better treated than average americans?
Aug 21, 2013 8:39PM
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Another government nightmare, put together by people who do not have the slightest idea of what the real problems with the healthcare system are.... no provisions for lowering RX costs or abuses by providers. If the country was not in bad enough financial condition, this will be the tipping point. Ask Spain and Greece how "affordable" their government giveaway programs have become.
Aug 21, 2013 8:44PM
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Best case scenario " you can eat or you can have health care".....and it won't be your choice!
Aug 21, 2013 9:15PM
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.....the healthcare free ride will go to obama's black race....................

 

That was his intent all along - the working class will "over-pay" for their coverage in order to pay for the 30 million blacks who will get a free ride.....courtesy of you, but obama will get all the credit!!

 

This is clearly socialism - the only remedy is to vote GOP in 2014 and give them the majority in the House and Senate and then defund this obamination!!!

Aug 21, 2013 7:33PM
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The problem with accepting subsidies for your insurance is that the govt then will get some sort of say in your insurance. If they are going to contribute, there must be something in it for them. Frankly, I prefer that stay out of my buisness, but I'm not sure that I will be able to afford insurance without the subsidy considering how much I pay now and that I know that it's not up to par with their requirements.
Aug 21, 2013 11:02PM
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For one...I believe the last election was corrupt. Obama was going to be president no matter what!!! He didn't get elected by our votes..Americans are smarter than that.

For two....If I refuse to pay for This Morons health care package..what happens?

For three..Do I have to say Im PROUD TO BE MUSLIM...instead of AMERICAN?

We are spiraling out of control and the only people that will prevail will be the people in government that are protected..... I feel sooo sorry for my kids that will be raised in this mess.

Aug 21, 2013 11:48PM
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Q-Why did MSN not ask these questions before this was voted on and became law ?

A-They are no more than a liberal propaganda machine,pushing forward a socialist presidents agenda.

 

And to all you people that were so ignorant that you voted  for obama and his lies.......you got what you deserve,the rest of us have to pay for your stupidity. 

Aug 21, 2013 9:54PM
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So It's buy our product or be taxed....now I know why the IRS ordered so many shotguns.
Aug 21, 2013 10:05PM
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hey as long as you liberal vermin have to pay for your FREE healthcare and go bankrupt doing it, makes me feel sooooooooooooooooooooooooooooooo good! you've gained what??? voting for some black commie muslim...what've you gained???? just wait till you get the BILL for what you voted for you smug-arrogant guilt-ridden self-loathing vermin global warming fear mongers and junk science promoting backwardsazzed sleazebags!....wish I could be there and see what you vermin will say?? wha happon!! wha happon! it was suposed to be free!! it was supposed to be freeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!!!!
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