Economists expected the law to significantly decrease premiums in the Empire State, which in 1993 prohibited insurers from denying coverage to individuals with pre-existing conditions, required carriers to charge “all consumers the exact same rate,” but did not compel young and healthy people to enroll in coverage. As a result, insurers dramatically increased prices and enrollment in the individual market “steadily diminished.” Today, just 17,000 New Yorkers “buy insurance on their own.”
The health law’s requirement to purchase insurance and the managed competition structure in the new exchanges will now increase enrollment, state officials predict, as New Yorkers will see lower premiums and will be able to choose from 17 different insurance plans when enrolling in coverage in October:
Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower. [...]
State officials estimate as many as 615,000 individuals will buy health insurance on their own in the first few years the health law is in effect. In addition to lower premiums, about three-quarters of those people will be eligible for the subsidies available to lower-income individuals. [...]
The plans to be offered on the exchanges all meet certain basic requirements, as laid out in the law, but are in four categories from most generous to least: platinum, gold, silver and bronze. An individual with annual income of $17,000 will pay about $55 a month for a silver plan, state regulators said. A person with a $20,000 income will pay about $85 a month for a silver plan, while someone earning $25,000 will pay about $145 a month for a silver plan.
The exchanges are creating “a very different dynamic” for insurance companies, Sabrina Corlette, a professor at Georgetown University’s Center on Health Insurance Reform, told the New York Times. “[I]t’s prodding them to be more aggressive and competitive in their pricing.”
The news comes as the House of Representatives prepares to vote on delaying the employer responsibility provision and the individual mandate, which is partly responsible for New York’s lower health care rates. During an appearance on CSPAN’s Washington Journal, Rep. John Fleming (R-LA) defended the votes and sought to dismiss the premium drop.
“People with more health care problems by law their rates will have to come down, but somebody has to pay for that,” he said. “It will be a combination of younger, healthier people who will have to pay higher rates, and that is if they opt in, which we believe many won’t. There is $1 trillion worth of taxes.”