The Cost of Not Shopping Around Under Obamacare

Jason Millman explains why, under Obamacare, “shopping around for health insurance becomes especially important.”

“Looking at just the proposed rates for 2015 health plans in nine states, six of those states could see health plans lose their benchmark status in 2015. That means if people stay in those plans, their premium subsidy won’t go as far. Of course, these are just proposed rates in just a few states that could still change — but this underscores how the exchange landscape could shift pretty dramatically year-to-year.”

“Avalere illustrates this with the example of a Maryland woman earning $17,500 a year enrolled in a 2014 benchmark plan with a $214 monthly premium. The Affordable Care Act caps her contribution to 4 percent of her income, meaning she actually only pays $58 per month.”

“Avalere projects her plan’s premium will increase to $267 per month in 2015 and lose benchmark status – instead a separate plan costing $231 will be the new benchmark. The difference between her plan and the new benchmark ($36) is added to the ACA income cap ($58), meaning she’d actually pay $94 a month for premiums in 2015. She gets a richer subsidy in 2015, but she still has to pay more.”

“This is hypothetical, naturally, but it demonstrates the possible steep cost of not shopping around.”

 

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