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Health Plans in the New Health Care Exchanges

health care exchanges
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If you’ve been keeping up with the health care debate you’ll notice that Republicans are predicting the demise of Obamacare and Democrats are predicting it to be the “second coming”. The debate is coming to a fever pitch again because the new health care exchanges are about to come to fruition. A health care exchange is an online marketplace where insurance companies will showcase various insurance plans so that consumers can compare and contrast different levels of coverage and how the premiums change based on that coverage. The idea is that by allowing consumers to see what one insurance company will charge versus another in one setting, the consumer will choose the one with the best price, thereby increasing competition and encouraging insurance companies to lower their rates.


Starting on October 1st, 2013, consumers will be able to go online and view these different plans and enroll if they don’t already have coverage or if they want to switch from their existing coverage. Coverage obtained from the health care exchange will go into effect on January 1st, 2014. Now that the October 1st date is almost upon us, some state exchanges have released their plan options and their associated premiums from participating insurance companies on the exchange.


My assumption was that with this increased competition, premiums would go down. Apparently that’s not the case. Critics and supporters alike all agree that premiums will go up but the amount they’ll go up is apparently up for debate.  The Editorial Board of the New York Times recently praised Obamacare based on early reports from Covered California – the California health care exchange. They were pleased that Blue Cross-Blue Shield would only raise premiums 13%! Why are they happy with a 13% increase – I thought premiums were supposed to go down.


In a Forbes article, Avik Roy quotes a recent press release from Covered California that “the rates submitted to Covered California for the 2014 individual market ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”  Peter Lee, the executive director of Covered California said, “this is a home run for consumers in every region of California.”  According to Roy, this is misleading. Obamacare will increase individual-market premiums by an average of 116 percent based on his analysis.


So I don’t know what to believe but keep in mind, even the most ardent supporters agree that premiums will go up and they’re busy patting themselves on the back. I just hope they don’t break their arms in the process because the cost of their insurance coverage is going up!




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