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Studies take early look at health law’s premiums

Published: Thursday, Sept. 5, 2013 11:21 a.m. CDT

WASHINGTON (AP) — Coverage under President Barack Obama’s health care law won’t be cheap, but cost-conscious consumers hunting for lower premiums will have plenty of options, according to two independent private studies.

A study released Thursday by the nonprofit Kaiser Family Foundation found that government tax credits would lower the sticker price on a benchmark “silver” policy to a little over $190 a month for single people making about $29,000, regardless of their age.

By pairing their tax credit with a stripped-down “bronze” policy, some younger consumers can bring their premiums down to the range of $100 to $140 a month, while older people can drive their monthly cost even lower — well below $100 — if they are willing to take a chance with higher deductibles and copays.

A separate study released Wednesday from Avalere Health, a private data analysis firm, took a wide-angle view, averaging the sticker prices of policies at different coverage levels.

Before tax credits that act like a discount, premiums for a 21-year-old buying a mid-range “silver” policy would be about $270 a month, the Avalere study found. List-price premiums for a 40-year-old buying a mid-range plan will average close to $330. For a 60-year-old, they were nearly double that at $615 a month.

Starting Oct. 1, those who don’t have health care coverage on the job can go to new online insurance markets in their states to shop for a private plan and find out if they qualify for a tax credit. An estimated 4 out 5 consumers in the new markets will be eligible for some level of tax credit.

Come Jan. 1, virtually all Americans will be required to have coverage, or face fines. At the same time, insurance companies will no longer be able to turn away people in poor health.

The Obama administration, which is running the markets or taking the lead in 35 states, is not expected to release final premiums until close to the Oct. 1 launch date. But the two private studies provide an early look at the emerging market.

Caroline Pearson, lead author of the Avalere study, said it will be competitive, but there will be big price differences among age groups, states and even within states.

The bottom line is mixed: Many consumers will like their new options, particularly if they qualify for a tax credit. But others may have to stretch to afford coverage.

“We are seeing competitive offerings in every market if you buy toward the low end of what’s available,” said Pearson, a vice president of Avalere.

The Obama administration said consumers will have options that are cheaper than the averages presented in the Avalere study. “We’re consistently seeing that premiums will be lower than expected,” she said. “For the many people that qualify for a tax credit, the cost will be even lower.”

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