Three large insurance companies are planning to offer health policies to individual Oklahomans at rates ranging from less than $100 to more than $1,000 per month through the new insurance marketplace being set up under the Affordable Care Act.
The rates posted by Aetna Life Insurance Co., Blue Cross Blue Shield of Oklahoma and Coventry Health & Life Insurance Co. for policies they will offer under the health-care law vary widely based on age, geographic location, tobacco use and plan type.
The lowest rate is $61 per month for a Blue Cross Blue Shield policy that requires buyers to pay virtually all of their medical expenses up to $6,350 per year. It would apply only to people below the age of 21 who live in central Oklahoma or Comanche County, which includes Lawton.
At the upper end, a $1,241 monthly rate would apply to smokers over the age of 63 who live in the Lawton area and who choose an Aetna Premier policy with a $2,000 deductible and $10 co-pays for routine doctor appointments.
The rates posted by the insurers do not take into account federal tax credits that will reduce the net cost to many buyers by hundreds of dollars, and in a few cases to zero, depending on their income.
“This is an enormous change,” said Deputy State Insurance Commissioner Mike Rhoads. “Now everybody has the assurance regardless of their health condition that they can get coverage … It’s the largest change with respect to health insurance since the passage of Medicare and Medicaid in 1965.”
Rhoads expressed concern that the rates posted by insurance companies for the new marketplace appear to be consistently higher than those charged for existing plans, although federal tax credits will soften the blow for most people.
The Oklahoma figures appear to compare favorably with Affordable Care Act rates in other states.
Aetna, for example, said it will charge $302 a month for a benchmark “silver” plan sold to a 40-year-old non-smoker living in the seven-county Oklahoma City metropolitan area. Coventry is offering a similar plan for $339.
Those figures are close to the $320 average that the Congressional Budget Office projected for benchmark silver plans nationwide. A recent study of rates posted in 17 states showed a range of $212 in New Mexico to $413 in Vermont for comparable plans.
Under “Obamacare,” as it is known, a silver plan is designed to cover 70 percent of all medical costs incurred by an average policy holder. In Oklahoma, the $302 rate applies to an Aetna Classic policy with a $5,000 deductible, $30 co-pays for routine physician services and 30 percent patient cost-sharing for hospitalization.
Cheaper rates apply to “bronze” and catastrophic plans that require policy holders to pick up more of the tab. A 40-year-old non-smoker in central Oklahoma will pay $239 a month for an Aetna Advantage plan that offers almost no reimbursements until holders exceed a $6,350 deductible.
Based on the three companies’ rate filings, it appears most marketplace customers are likely to wind up with policies that cost somewhere in the range of $200 to $700 a month, before tax credits.
The biggest variable is age. The Affordable Care Act allows insurers to charge three times as much to cover a 64-year-old as they charge a 21-year-old for the same plan. All of them appear to be doing so.
Aetna’s rates for its benchmark silver plan start at $150 per month for people below the age of 21 in the Oklahoma City metro area. Those aged 21 to 24 will pay $236. The rates rise to $268 for 30-year-olds, $302 for 40-year-olds, $421 for 50-year-olds, $640 for 60-year-olds and $707 for 64-year-olds. Medicare takes over at age 65.
Another variable is tobacco use. Smokers will pay 10 percent more than non-smokers for Aetna’s policies, 20 percent more for Coventry’s policies and anywhere from 10 percent to more than 30 percent more for Blue Cross Blue Shield’s plans.
Geographic location is a factor, too. Under Obamacare, Oklahoma has been divided into five regions. Insurers are allowed to charge different rates in different regions based on their claim histories and projected costs.
Aetna’s lowest rates will be offered in the Oklahoma City metro area. Rates are 5 percent higher in Le Flore and Sequoyah counties, 13 percent higher in the seven-county Tulsa metro area, 34 percent higher in Comanche County and 23 percent higher in the rest of the state. Coventry, on the other hand, is offering its lowest rates in Comanche County.
In most cases, marketplace customers will wind up paying considerably less than the companies’ policy rates because they will receive federal tax credits to offset the cost. The amount of the credits will vary, depending mainly on income, and will be calculated on a person-by-person basis.
The tax credits will be available to individuals with incomes between $11,490 and $45,960 a year, and four-person families between $23,440 and $94,200. People with higher incomes can purchase insurance in the federal marketplace, but they will pay the full posted rate for their plans.
Oklahomans with incomes below 100 percent of the federal poverty level are not eligible to receive subsidized plans through the marketplace because the Affordable Care Act originally contained a nationwide expansion of Medicaid to cover everyone below the poverty line.
That provision of the law was struck down by the U.S. Supreme Court. Oklahoma declined to expand its Medicaid program voluntarily. As a result, as many as 150,000 uninsured Oklahomans are expected to remain in a coverage crater, ineligible for either subsidized program.
About 337,000 uninsured Oklahomans will be eligible to participate in the health care marketplace and receive federal tax subsidies, according to one recent study. The marketplace is open to anyone who can’t participate in an affordable employer-provided plan and who doesn’t qualify for other forms of public insurance such as Medicare.
The Affordable Care Act directs most Americans to buy insurance if they don’t already receive it from their employer or a public insurance program such as Medicaid. People who don’t do so, with some exceptions, will be subject to a $95 fine next year, rising to $695 in 2016.
The marketplace will begin accepting applications on Oct. 1 for coverage that begins on Jan. 1, 2014. The federal government already is pre-registering applicants through its marketplace website, www.healthcare.gov. The toll-free help line is 1-800-318-2596.
The federal government is operating the marketplace in Oklahoma. Private insurance companies will issue the policies. Because the marketplace will offer a wide range of plans with different rates and tax credit calculations, it is expected that many people will need one-on-one guidance. Individual counseling will be provided by the federal government, by health clinics and other nonprofit organizations, and by licensed health insurance agents.
Rhoads said as many as 500 health insurance agents have participated in training sessions conducted by the Oklahoma Insurance Department and intend to help people find policies through the marketplace.
“We think they’re going to play a major role placing people in the exchange,” Rhoads said. “What we would encourage everybody to do is shop and get the best deal for themselves.”
Five companies are planning to offer insurance policies to Oklahomans through the health care marketplace. Three of them — Aetna, Blue Cross Blue Shield and Coventry — are offering preferred provider plans that allow policy holders to pay less if they use “network” doctors and services, but let them to go outside the network if they choose and still receive some insurance reimbursement.
Two companies — GlobalHealth Inc. and Community Care — operate health maintenance organizations that require policy holders to use only network doctors and health facilities. If they go outside the network, they pay the entire cost themselves.
All five companies have posted their rates with the Oklahoma Department of Insurance. But the department released the information only for the three PPO companies. It said state law does not allow it to release rate information for HMOs.
Aetna acquired Coventry earlier this year. But the two companies made separate rate filings listing different plans and rates for the policies they plan to issue in Oklahoma.
The three companies’ rate schedules are massive. Blue Cross Blue Shield filed a 207-page document containing hundreds of rates; Aetna’s filing listed 35 plan types and filled 151 pages.
The companies did not provide information in their filings on how rates for plans being offered under the Affordable Care Act compare to plans on existing policies. Advocates of the law caution that such comparisons are misleading because existing plans often don’t contain the full range of benefits required under the act, and companies can no longer exclude people with pre-existing medical conditions.
Oklahoma Insurance Commissioner John Doak, a critic of Obamacare, said the new policies being offered to individuals in the federal health insurance marketplace will cost 30 percent to 100 percent more than pre-Obamacare policies. He said small group insurance plans will be 10 percent to 25 percent higher.
“Our fears have been confirmed,” Doak said in a news bulletin. “For some consumers, the cost of health insurance will increase significantly.”
Doak’s assertion was challenged by David Blatt, director of the Oklahoma Policy Institute, a non-government research group that supports the health-care act.
“His claims are not based on data, but rather on informal conversations that his staff apparently had with some insurance carriers,” Blatt said. “Commissioner Doak’s statement is in line with his political opposition to the Affordable Care Act.”
Oklahoma Insurance Department spokeswoman Calley McGehee Herth said Doak’s rate-increase figures were based on detailed analyses by the insurance carriers providing the policies. Their findings were then communicated to state officials, she said.