The state provided the clearest picture yet of health care reform costs for Minnesotans.
Minnesotans who shop on the state’s new health insurance exchange will see some of the lowest premiums in the nation, state officials said Friday, with the vast majority of residents having a choice of at least three insurance companies.
The online marketplace, known as MNsure, will be “undeniably competitive,” said Minnesota Department of Commerce Commissioner Mike Rothman, whose agency approved the rates. “It’s good news for Minnesota consumers.”
But experiences will vary widely, and many will still feel sticker shock when the MNsure exchange launches for open enrollment in October.
Monthly insurance premiums will depend on a myriad of factors — how old you are, where you live, whether you smoke and whether your income qualifies you for tax credits that can lower the cost.
Consumers’ delight or dismay will depend in large part on how MNsure’s offerings compare to current plans, which may not provide as much coverage or may come with deductibles that are much higher than the federal law will allow starting in 2014.
“Beware of averages,” cautioned Scott Keefer of Blue Cross and Blue Shield of Minnesota. “Each person needs to weigh the options. Some people will see a picture that is better; for some, it will be worse.”
Still, Friday’s announcement provided the clearest picture yet for Minnesotans of the costs on the exchange, a key element of the federal health law commonly known as Obamacare.
Shopping on the exchange will enable consumers for the first time to make apples-to-apples comparisons among a variety of options to pick the plan that best fits their pocketbooks and medical needs, according to MNsure officials.
The exchange will serve those on public programs, individuals and small-business owners.
Those who get coverage at work or through Medicare won’t need to use it.
National studies released in recent weeks have shown premium prices on exchanges across the country coming in much lower than forecast due to added competition or aggressive state regulators.
Twin Cities premium rates are as much as a third lower than 11 other metropolitan areas around the country that have released premium rates on their exchanges, according to state officials.
To keep premium prices low on MNsure, some consumers may have to live with fewer choices of clinics or doctors. And they may have to pay higher out-of-pocket costs.
Tax credits on sliding scale
Under the federal law, total out-of-pocket costs, including deductibles and copays, are generally capped at $6,350 for individuals and $12,700 for families starting in 2014.
To make premiums more affordable for middle-income earners, the federal government will provide immediate discounts on premiums in the form of a tax credit, based on household income. Tax credits will be available to individuals earning between $22,980 and $45,960 and a family of four with income from $47,100 to $94,200. The higher your income, the less help you’d get.
All of the Minnesota plans that submitted rate proposals to sell on the exchange were approved, Rothman said.