A Look At The New Individual Family Health Insurance Rates

This is what we\’ve all been waiting for…what will the new rates look like under health reform? We don\’t have the full rate schedules yet but we did get average rates by area and an example rate by area for a 40 year old (gender will not affect pricing) for the new Health Exchange plans. There\’s been a lot of media coverage about whether these rates are high or not (and why or why not). Let\’s take a quick look until the full rates come out.

Comparing Apples and Apples

This is going to be tricky. We currently have dozens of health plans available on the market with very different benefits and rates. The new landscape will have 4 plan levels (Bronze, Silver, Gold, and Platinum) plus one catastrophic plan for adults under age 30. How do we \”map\” over the current plans to the new ones to make an accurate comparison? Our best bet addresses two different issues. First, most people are on higher deductible health plans in the California health market. The reason is obvious…health insurance is expensive and has essentially priced-out the richer plans on the market. Even the richest plans have a $1000 deductible which is quite different from the old no-deductible plans of 5-7 years ago. The average deductible choice is between $3K and $5K annually so that would be the first place to compare. Luckfully, the Bronze health plan fits the bill here with a $3500 deductible. This matches the two most popular plans on the market, the Health Net Advantage $3500 plan and the Clear Protection $3300 (also the Smart Sense $3500 or Shield Wise $3500 plan towards the higher end of this spectrum). The fact that there\’s a pretty good match (Bronze plan) and this happens to match very popular plans on the market is a good place to start. Let\’s begin.

Grandfathering and Subsidies

Before we dive in, we need to level the playing field. Many people have Grandfathered health plans (effective prior to 3/23/2010 and not changed since). These plans are not subject to many of the mandates and therefore are not as expensive. For this reason, we recommend anyone on a Grandfathered plan to keep it at least till we see what the new rates are exactly. Secondly, some people will qualify for health subsidies if they make under 400% of the Federal Poverty Level. This is potentially a great deal of money and if you qualify for a subsidy, it will be hard to justify anything but the Exchange Silver plan (you will be able to quote here Oct 1st, 2013). So, now that we addressed those two issues, let\’s look at price comparisons for three distinct groups.

Three different health insurance situations in California

1. Let\’s take the example of a 40 year old (Los Angeles) on a popular Clear Protection $3300 high deductible grandfathered plan. The current tier 1 rate is $105. The lowest rate from one of the major 4 carriers in the Exchange for the Bronze plan will be $210. This person will see premiums roughly double (and therefore should not move unless offered considerable subsidies).

2. People with current plan, non-grandfathered who qualify for a health subsidy. In this case, the current $3300 Clear Protection plan is $172 monthly (big jump for same plan from Grandfathered option). The Silver Exchange plan will be $252 but subsidies will bring that down significantly. This person will see rates reduced significantly due to subsidies depending on income level.

3. People with current plan, non-grandfathered who do not qualify for a subsidy. Again, Clear Protection plan is $172 versus Bronze plan at $210. Increase of 22%.

As you can see, any news outlet that claims costs are higher or lower do so by leaving out a lot of information. Yes, you can take an average but any given person will have significantly different experience from the average due to health subsidies and grandfathered status. You will be able to quote all options starting October 1st from our Health Exchange Quote page. We hope to have the new rates with full detail in the next 30 days.

Dennis Jarvis is a licensed agent whose focus is helping people and companies find cheap California health insurance. More info: Example of California Health Exchange Rate Example

Dennis Jarvis is a licensed California health insurance agent with extensive knowledge of the Individual and Small Group California health insurance market. http://www.calhealth.net

Author Bio: Dennis Jarvis is a licensed agent whose focus is helping people and companies find cheap California health insurance. More info: Example of California Health Exchange Rate Example

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