It’s the biggest question surrounding federal health reform.
What’s that insurance mandate going to cost you?
On Friday, the Nevada Division of Insurance sort of had an answer.
The division surveyed 382 proposed plans for the state’s individual insurance market for a glimpse of monthly premiums Nevadans might pay come Jan. 1, when the Affordable Care Act, or Obamacare, requires all Americans to carry health insurance or pay a penalty. There were all kinds of caveats: The rates weren’t a complete listing of all proposals, and the division has yet to approve them. Plus, they apply only to consumers on the individual market.
Individual buyers make up just 15.4 percent of Nevada’s fully insured market, but their premiums are an important barometer of trends across the board, including among large and self-insured companies, said Nevada Insurance Commissioner Scott Kipper.
And here’s what that barometer forecasts: The cheapest plan an individual would be able to buy through the Silver State Health Insurance Exchange in Southern Nevada would be a catastrophic plan with a monthly premium of $148. Outside the exchange, the least-expensive coverage would cost about $160. Catastrophic plans offer less coverage than other plans and will be available only to people under 30, or to consumers facing financial hardships.
If you want to spend more, you’ll be able to buy silver or gold plans, which cover more costs. The premium sampling shows that exchange-based silver plans would start at $184 a month for 25-year-olds and go up to $582 for 60-year-olds. Gold plans would start at nearly $300 a month for younger adults, and as much as $805 for seniors.
Premiums for plans outside the exchange would be slightly higher. Plus, there’ll be lower-coverage bronze plans and richer platinum plans that could push premium costs in either direction.
Division officials declined repeatedly to say how much premiums might rise compared with 2013 averages, because new plans have stricter coverage rules.
“The products in the exchange are going to be significantly different than products available right now,” Kipper said. “They’re meeting new federal requirements, as well as wrapping around mandates we have here in the state. It’s very difficult to compare plans and make an apples-to-apples comparison.”
Added Jon Hager, executive director of the Silver State Health Insurance Exchange: “The entire market is changing. You can’t gauge the success or failure of the new rules or of the exchange simply by comparing 2013 to 2014. Really, this is a long-term project. You have to look at it over a three- or four-year period with trends in health status.”
Still, a search at insurance brokerage website eHealthInsurance found catastrophic plans in Southern Nevada beginning as low as $29 a month. One company quoted a PPO with a $1,500 deductible for a monthly payment of $83.
Other states have crunched numbers that show big potential increases. In Washington, officials say premiums could spike as much as 80 percent. Indiana’s looking at an average jump of 72 percent, while Ohio regulators pegged a potential increase of 88 percent. In California, individual rates could more than double.
Division officials told the Review-Journal in May that some individual plans could see “substantial” premium increases after Obamacare takes effect.
But Kipper said tax credits will help defray costs. If you’re single and earn less than $45,960 a year, you’ll get a credit. A family of four qualifies if its income is less than $94,200.
“We think, with the assistance of the tax credit, that insurance should be available to everybody,” he said. “Everybody’s going to have to make a decision on what’s affordable.”
Plan premiums have to jump because Obamacare boosts coverage. The state’s benchmark plan, modeled after Health Plan of Nevada’s point-of-service plan, covers maternity care, mental health services, emergency services, rehabilitative care, preventive care and pediatric medical and dental care. If you work for a big business, your coverage probably already offers those benefits. But individual plans have typically been skinnier to keep them more affordable. Plus, under the new rules insurers must pay for at least 60 percent of the cost of care, up from the 40 percent paid by most individual plans.
Frank Nolimal, an employee benefit consultant with Assurance Ltd. in Las Vegas, agreed with division officials that it’s difficult to compare today’s plans with 2014’s versions. But he added that insurers are looking for ways to both comply with coverage mandates and keep premiums down.
Expect to see smaller networks, for starters. To control costs, an insurer with 650 to 700 primary care providers in its network might cut back to 250 to 350, and allow patients to see only doctors who work for company-owned clinics. Consumers may also see higher deductibles of around $2,000. Without those tweaks, average premiums for younger people might jump 100 percent or more, Nolimal said. With them, gains could be more like 60 percent.
Nevada Health CO-OP, one of the four insurers that plans to offer coverage through the state exchange, is working to keep costs low, said CEO Tom Zumtobel. It’s taking advantage of aggressive discounts wrangled with local providers by its sponsoring organizations, the Culinary Health Fund and the Health Services Coalition, he said, and it’s keeping administrative costs low and striking “collaborative relationships” with doctors and hospitals. The CO-OP expects 30,000 enrollees in its first year, 90 percent of them individual buyers.
The Division of Insurance will unveil final, approved premiums on Sept. 1. Plans that get a thumbs-up would go on the market Oct. 1.
To see the plans, visit exchange.nv.gov, and look for “Proposed 2014 Rates” under the “What is New” menu.
Contact reporter Jennifer Robison at firstname.lastname@example.org or 702-380-4512. Follow @J_Robison1 on Twitter.