LITTLE ROCK — The rates insurers will charge for policies purchased through an exchange created under the federal health care law are at levels as much as 25 percent below what had originally been requested, officials said Monday.
The state Insurance Department released the proposed rates for 71 qualified health insurance plans that will be sold on the individual market in the new Health Insurance Marketplace.
Under the federal Affordable Care Act, enrollment begins Oct. 1, and rates and coverage will go into effect Jan 1.
"All plans meet the requirement that health insurance coverage be offered to everyone, even those with pre-existing medical conditions," state Insurance Commissioner Jay Bradford said. "The plans cover 10 essential health benefits, have no annual or lifetime limits and have no ratings on health factors."
Because of new tax credits available for assistance in paying premiums, few Arkansans will pay the total premium amount, Bradford said.
For a 30-year-old individual in Arkansas, the average base premium of plans to be sold in the exchange will be $284.74 a month.
For someone with an annual income of $17,235 annually, the monthly tax credit would be $227.29 and the monthly consumer payment would be $57.45.
For someone making $22,980 a year, the monthly tax credit would be $164.10 and the monthly consumer payment would be $120.65. With an annual salary of $28,725, the monthly tax credit would be $92.04 and the monthly consumer payment would be $192.70.
For two 40-year-old adults with two children, the average base premium will be $948.82, with premiums to be divided in the following manner depending on annual household income:
—$35,325 income: Monthly tax credit of $831.07 and a consumer payment of $117.75.
—$47,100 income: Monthly tax credit of $701.55 and a consumer payment of $247.28.
—$58,875 income: Monthly tax credit of 553.87 and a consumer payment of $394.95.
Under Arkansas’ proposed private option for Medicaid expansion, federal Medicaid dollars would be used to subsidize insurance premiums for persons earning up to 138 percent of the federal poverty levels. Officials estimate the program would cover up to 250,000 of the state’s working poor.
David Dillon, an actuary for the Insurance Department, said the premium rates were reviewed for reasonableness and that the "resultant change in premiums is generally lower than what was expected by independent forecasters."
The average approved rate in the individual market is about 10 percent below what was projected by the Society of Actuaries," he said.
Insurance premiums for all individuals will vary only by age, geography, family size and tobacco. Three levels of plans — bronze, silver and gold — will be available. The bronze plans are likely to have lower premiums but higher out-of-pocket costs for medical services are approved, officials said. In addition, plans with higher deductibles are available for young adults under the age of 30 and certain other eligible individuals.
The state Legislative Council on Friday postponed its review of a $5.1 million contract for a campaign to publicize the new health insurance exchange, saying it wanted to wait until information was released on the rates that insurers will charge in the exchange.
Bradford said Monday he was optimistic lawmakers would receive the rates favorably.
"I’m very positive about the reception of this once you look at the tax credits factored in. This is very broad coverage, with no health questions. That’s very important," he said. "I’m very optimistic that this is going to be approved. It makes a lot of sense for the people of Arkansas, and I think they’re going to realize that."
Rep. Douglas House, R-North Little Rock, whose motion to delay the review was approved by the council, said Monday he had reviewed the rates and found them to be reasonable.
"If you’re shopping for the gold plan, it’s going to be expensive. But for catastrophic coverage, the basic coverage, they’re going to be in pretty good shape, with higher co-pays and deductibles, of course."