How much will health insurance cost on the Affordable Care Act (ACA)’s new state exchanges? The answer varies widely across the United States. Here’s a look at exchange rates, and how/why they differ from state to state.
HRI examined unsubsidized monthly exchange premiums for a 27-year-old and a 50-year-old in metropolitan areas across the US.* The second-lowest-cost silver plans – which are used to determine an individual’s tax credit – were mapped from state-based exchanges and HealthCare.gov to capture a full 50-state snapshot. While premium subsidies can be applied to any metal tier, only silver plans are eligible for cost-sharing reductions, so they will likely be the most popular choice for the lowest-income exchange consumers. Shoppers earning between 100% and 400% of the Federal Poverty Level will receive subsidies to reduce their premiums.
Colors correspond to the range of the second-lowest-cost silver plan. Click on a state to see additional details.
Source: HealthCare.gov, state exchange websites.
In just over half of states, a 27-year-old will pay between $195 and $250 a month for the second-lowest cost silver plan. In five states, the person will pay more than $320 a month. The most expensive silver premiums for a 27-year-old are clustered along the eastern seaboard, particularly in the Northeast. At the higher end is Vermont, at $413 a month.
The 50-year-old will pay more for coverage, typically about 70% more than the 27-year-old. In more than half of states, the second-lowest cost silver plan premium is between $340 and $415 a month. In four states, premiums are more than $490 a month. Alaska tops the list at $605 a month.
Why are premiums more expensive in certain states? Weaker competition in the insurance and hospital markets and a stronger presence of high-cost providers could partly explain the differences. Differences in state benefit mandates, the level of state exchange plan management, and hypotheses by insurers about likely enrollees may also play a role.
For more on how the rollout of health insurance exchanges is impacting the healthcare sector, see HRI’s series Health exchanges: Open for business.
*The state premiums were based on the most populous county in each state, with the exception of CO and MD. In those states, Denver and Baltimore Counties were substituted for the most populous counties, which were not part of the Denver or Baltimore metropolitan statistical areas.
The map’s colored intervals were selected to display some states in each of the four colors, and with boundaries that didn’t separate plans with variations of just a few dollars. The intervals were developed based on the notion that premiums have a central tendency, which is shown by the fact that half the premiums for each age group fall within relatively narrow bands. Specifically, 2/3 of the states have premiums that fall into the middle two color tiers.