In Georgia, the “Affordable” Care Act is shaping up as anything but.
Georgia’s insurance commissioner, Ralph Hudgens, this week revealed the bids from health insurers seeking to participate on our state’s (federally run) insurance exchange. The numbers are startling: Many consumers would face premiums that were double or nearly triple what they pay today for comparable coverage on Georgia’s individual insurance market.
For example: A single, 25-year-old man in Atlanta who doesn’t smoke can currently buy a plan similar to the Obamacare “bronze” plan — the cheapest one allowed by the 2010 health-reform law — for as little as $66 a month, according to figures provided by Hudgens’ office. But the proposed premiums for an actual Obamacare bronze plan in 2014 start at $151 a month.
That’s an increase out of pocket of at least $85 per month, or more than $1,000 in additional costs per year. To repeat, that’s $1,000 a year more for virtually the same coverage that consumer’s getting now.
Hudgens’ figures paint a similar picture for other Georgians. A single, 45-year-old, non-smoking man in Atlanta could expect to pay at least $98 more per month ($1,175 per year) for bronze-level coverage starting next year.
Change the age to 64 and up, and the increase starts at $157 monthly, or $1,884 annually.
What would $157 a month buy? It would almost make the lease payment on a compact car, according to what some local auto dealers are currently advertising.
“The actuaries that have studied” the insurers’ proposed premiums, Hudgens told me Tuesday, “say they’re not excessive.”
Their opinion, he said, is based on the changes Obamacare requires of the companies. One such change is narrowing the gap between what they can charge, say, the skinny Jack Sprat vs. the rotund Boss Hogg. If you buy insurance on the individual market, Obamacare means you will get less of a break than in the past for having relatively healthy habits.
Different people will have different experiences. Women, who typically pay more for comparable coverage in Georgia’s individual market, will also see large increases: A single, 25-year-old non-smoker in Atlanta would pay an additional $66 a month for bronze-level coverage. That’s not as large as the increase for her male peers, but it’s still almost $800 per year more than she pays now.
Those prices don’t qualify as “affordable,” in any sense of the word, for those who have to bear the full brunt of the increase.
“I think it’s going to increase the [ranks of the] uninsured,” Hudgens told me. “You’re going to have many people that currently have coverage, that they don’t want to pay this increase now.”
The fine — er, tax, according to the Supreme Court — for failing to purchase insurance starts next year at $95 or 1 percent of gross income. Some Georgians may well decide that makes more financial sense.
But what about Obamacare’s subsidies? Won’t they help a lot of people who buy insurance on the exchange?
That depends. The subsidies are tied to a person’s income, gradually decreasing until income reaches four times the official federal poverty level — about $46,000 per year for a single person. It’s not yet clear exactly how much in subsidies a Georgia exchange customer would qualify for.
But based on the best information available, and extrapolating from a calculator by the Kaiser Family Foundation which uses national averages, we can make some estimates.
Even after accounting for subsidies, our aforementioned 25-year-old male, for example, would likely pay more than today for bronze-level coverage if he earned just $24,475 a year. That’s about two-thirds the state’s per capita income.
Is that how you remember President Barack Obama and the Democrats selling their plan four years ago? Me neither.
Leave it to Washington’s smart set to decide the way to make insurance more affordable, both for individuals and as a nation, was to jack up prices for everyone — and then subsidize coverage for some people at the new, higher prices.
“Affordable,” indeed.
