LANSING (AP) – Michigan residents who buy health insurance on the state’s new online exchange, which opens next week, will pay on average $306 a month – before tax credits – for a mid-range plan not including out-of-pocket costs, according to figures released by the Obama administration Wednesday.
That is below the national average of $328 and ranks 29th-lowest out of 47 states for which data was available. People will pay dramatically different premiums depending on their income, family size, age, hometown and tobacco use.
When tax credits are factored in, a 27-year-old in Michigan making $25,000 a year will pay on average $145 per month for a benchmark policy known as the second-lowest-cost silver plan. It will cost $202 before the subsidy.
A family of four with $50,000 in annual income will pay on average $282 in monthly premiums – $798 before qualifying for tax credits.
The state was caught off guard by Washington’s release of average premium information for 36 states, including Michigan, where the federal government is taking the lead to cover uninsured residents. Michigan plans to make public specific rates for more than 100 plans offered by state insurers on Oct. 1, when enrollment begins. Coverage kicks in Jan. 1.
“It’s somewhat limited data. They only show the lowest-cost plan in each of the categories,” Caleb Buhs, spokesman for the state Department of Insurance and Financial Services, said Tuesday. “It doesn’t give a full picture of what will be available.”
Under the 2010 federal health care law, uninsured Americans required to have insurance in 2014 or else pay a penalty will be covered in one of two ways.
Many, ranging from lower-income workers to the solid middle class, will qualify for tax credits to help buy a private plan through a state market, or exchange. The government will send money directly to insurers, and policyholders will pay any remaining premium.
The poor and near-poor in Michigan will be steered to Medicaid since the state recently agreed to expand the program.
According to the U.S. Health and Human Services Department, Michigan has the most insurers – 13 – offering coverage through a federally controlled exchange. The average is eight among 36 states studied.
States with lower premiums tend to have more competition, the study found.
Four levels of coverage will be offered on the exchange: bronze, silver, gold and platinum. Bronze plans generally have the lowest premiums but cover less while platinum plans have the highest premiums and cover more.
If a 27-year-old Michigan resident with $25,000 in annual income buys a bronze plan, he or she will pay $89 on average per month, $56 less than for a silver plan. A family of four earning $50,000 per year will pay $80, $202 less per month than for a silver policy.
A silver plan covers 70 percent of medical costs, so policyholders will pay the difference up to an annual out-of-pocket cap.
The federal government is running Michigan’s marketplace after Republican lawmakers rejected GOP Gov. Rick Snyder’s request that the state operate the exchange.
Confused about the new Affordable Care Act? You can get information and have your questions answered during a forum Wednesday beginning at 6 p.m. at the Palace of Auburn Hills titled “Patient Protection 7 Affordable Care Act: The Effect on Your Business.”
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