This week the Kaiser Family Foundation released “An Early Look at Premiums and Insurer Participation in Health Insurance Marketplaces, 2014.” The report provides a summary of health insurance costs before and after federal Affordable Care Act subsidies kick-in for individuals who obtain coverage through the federal health exchange or health insurance marketplace. The premium for one of the middle-tier or “silver” plans for a 25 year-old, earning $28,725 living in Portland, Maine is $232 a month before federal subsidies become available. After the subsidies, the cost is $193 per month. For a 60 year-old earning the same income, the cost is $626 before subsidies take effect and $193 afterward.
This information highlights two very important points in the run up to the launch of the health insurance marketplace on October 1. First, individuals who currently lack affordable health insurance may find much better options through the marketplace. We should be doing everything we can in Maine to promote this opportunity. Second, as Gorman Actuarial predicted in its review of new health insurance laws the Maine legislature passed in 2011, it is the Affordable Care Act and not changes to how insurance companies set their rates that will ultimately reduce the number of uninsured people in Maine. Look no further than the pre-subsidy disparity in costs between older individuals and younger individuals for proof that absent the ACA things would be much worse for everyone but especially for older Mainers.
One final note. While the subsidies will be important in increasing affordability, they are not available to Mainers who will need them most as Governor LePage suggested in error at a press conference last week. Individuals living below the poverty line are not eligible for federal subsidies through the health insurance marketplace. That’s why it is vital that the state accept federal funds to expand Medicaid. Otherwise tens of thousands of Mainers will lack affordable access to a family doctor.