New Jersey individuals and families will have 29 health plans to chose from on the new Affordable Care Act marketplace launching next week, and perhaps unsurprisingly, the cost of a typical premium is more here than the U.S. average.
According to HHS, New Jersey's benchmark silver plan averages $385 a month, compared to $328 nationally, while the lowest cost bronze plan averages $332 a month in New Jersey, compared to $249 nationally.
However, according to an analysis by the federal Department of Health and Human Services, the subsidies for those with low and moderate incomes will result in a significant discount on their premiums.
For example, a New Jersey family of four with annual income of $50,000 will pay an average of $282 a month, after subsidies, for a benchmark "silver" plan covering 70 percent of the family's medical expenses. If that family chooses the least-expensive "bronze" plan — covering 60 percent of their medical expenses — the monthly premium will average $131 a month after the tax credit.
A higher-income family that doesn't qualify for any subsidy would pay $943 a month, on average, for that silver plan.
However, it's important to note that the HHS figures are statistical averages — during a conference call with reporters, federal officials said the actual plans and their prices won't be made public until Oct. 1, when insurers start selling policies on the marketplace. Three insurers will compete for customers on New Jersey's marketplace: Horizon Blue Cross Blue Shield of New Jersey, AmeriHealth New Jersey and Republic Health Insurance of New Jersey.
Each insurance company has set its premiums and filed them with the government. Insurers can use age, but not gender, when setting rates, and older consumers will generally pay higher premiums than younger consumers. The insurers won't know what their competitors are charging until Oct. 1, and they won't be allowed to change their prices until 2015.
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In an interview earlier this month, Ryan Petrizzi, director of sales operations for AmeriHealthNJ, said the company will offer a range of premiums levels. He said premiums will vary in part based on which AmeriHealth network the consumer chooses — those who select the New Jersey-only network of health care providers will pay less than those who choose AmeriHealth's national provider network.
Larry Altman, vice president of Horizon's office of health care reform, said consumers should compare prices, but also look at the insurer's network, should there be a particular doctor or hospital they want to use. Horizon is by far the largest health insurer in New Jersey, with 3.7 million members, and its strong brand should help attract new consumers on the marketplace, Altman said.
A study by the Rutgers Center for State Health Policy estimates several hundred thousand of the state's more than 1 million uninsured residents will get coverage on the exchange, though it's expected to take years to reach the potential of the ACA, given the low levels of public awareness.
James Martin, executive director of the new Health Republic insurer, said his company "will be out there with very competitive rates, and I really don't think there will be a significant (price) variable among the three companies."
"We are excited to see that rates in the marketplace are even lower than originally projected," said HHS Secretary Kathleen Sebelius. "Consumers will be able to choose from a number of new coverage options at a price that is affordable."
HHS officials said while consumers won't get an advance look at the plans and premiums before Oct. 1, they will have six months to make their choice: open enrollment on the marketplace will continue until March 31.
The subsidies are on a sliding scale for individuals and families with annual income between 138 percent and four times the federal poverty level. Those below 138 percent of poverty will be eligible for free coverage from Medicaid. The subsidies phase out completely at four times the federal poverty level, or $46,000 for a single individual.