Health Insurance Exchange Rates Surprisingly Low

Doug Desjardins, July 19, 2013

Blue Shield of California says it expects rates for its policyholders to increase 13% on average in 2014, an increase executives say will be "legitimately below what people expected them to be."

Ready or not, state health insurance exchanges are due to launch open enrollment just three months from now. Some states are scrambling to meet that deadline, but others have already released a list of tentative rates that offer a surprising glimpse into how healthcare reform will work.

And though millions of individuals are expected to purchase insurance in 2014—many for the first time ever—the big question is how many people will actually follow through and make a purchase via the exchanges.

No "Doom and Gloom" in California
In late May, California and Oregon released a list of health plans that will sell insurance on their exchanges and the rates they'll offer. In California, the average premium for a person not eligible for a subsidy will be $321 per month for a plan with a $2,000 deductible, about on par with current rates. People eligible for the maximum subsidy—those with annual incomes greater than 138% of the poverty level—will be able to buy health insurance for as little as $18 per month.

"These rates are way below the doom-and-gloom scenarios we have heard," said Peter Lee, executive director of Covered California. "But let's be clear: Some consumers will see their premiums go up. There may be some sticker shock."

Lee said the affordable rates "are the result of insurers customizing networks in the 19 rating regions, giving doctors and hospitals the best pricing they could sustain."


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