It has been clear for some time that the federal health-care overhaul will bring better benefits — often at a higher cost — to people who buy coverage directly from health-insurance companies.
The individual insurance market is expected to be the source of coverage for 735,000 Ohioans by 2017, up from 350,000 in 2010.
Young men likely will see the most-significant rate increases for coverage, especially if they don’t qualify for subsidies through the new state insurance exchange. Women, who often have higher health-care costs than men when they’re younger, no longer will have to pay more than men for coverage. And people who are nearing retirement age actually could see their premium costs decline.
Now that rate filings with the Ohio Department of Insurance have been made public, it’s possible to glimpse how much more or less some hypothetical Franklin County residents might pay next year for coverage that is the same or similar to what they have now, despite a slew of variables that can complicate comparisons.
For example, a 29-year-old man living in Columbus who is not a smoker would pay $2,648 annually in unsubsidized premiums next year for a Medical Mutual of Ohio plan that has a $6,000 deductible and $6,000 out-of-pocket maximum.
For a very similar plan this year, 29-year-old men might pay anywhere from $681 to $2,269 in premiums, according to Medical Mutual.
Why such a big difference in the current rates? Medical Mutual uses a common insurance-industry practice of “medical underwriting”: An insurer uses applicants’ health information to determine their premiums.
Starting next year, only an enrollee’s age, place of residence and use of tobacco products can be used to influence premium rates for a particular plan.
Obamacare also will compress how much more people on the cusp of Medicare eligibility can be charged — no more than three times what the youngest adults pay for coverage. Currently, premium rates for older people are up to six times what they are for young adults. That generally will mean pricier premiums for younger people, even though they often are healthier and cost less to insure, and potentially lower costs for older people.
At The Dispatch’s request, Medical Mutual of Ohio provided a comparison of a high-deductible health plan in effect this year with a similar — though not identical — plan that it will offer next year through Ohio’s new online health-care exchange. One difference lies in the benefits: The plan next year will include maternity coverage and some other health benefits that the federal government is mandating. This year, such coverage was not available on this particular Medical Mutual health plan.
Anthem Blue Cross and Blue Shield in Ohio, another well-known insurer that will offer several health-care plans through the exchange in Franklin County next year, declined a similar information request from The Dispatch.
So why will rates go up? First, individuals who buy coverage directly from health insurers will be getting a more-extensive range of benefits. And health insurers must start guaranteeing access; they no longer can turn away people based on their health.
Amy Rohling McGee, president of the Health Policy Institute of Ohio, said she had to shop for insurance through the individual market when she was the lone employee of a small nonprofit organization. She was turned down because of a health condition that she said was relatively minor.
“If I had something like cancer or diabetes, I would imagine it would be difficult or nearly impossible” to get coverage, she said.
Officials with the nonpartisan Kaiser Family Foundation said in a report this year that the individual insurance industry has been widely acknowledged to be “broken, with restricted access, limited benefits, high administrative costs and frequent and large premium increases subject to inadequate oversight.”
By Ben Sutherly - The Columbus Dispatch, Ohio (MCT)
©2013 The Columbus Dispatch (Columbus, Ohio)
Visit The Columbus Dispatch (Columbus, Ohio) at www.dispatch.com
Distributed by MCT Information Services