Some North Carolinians with low incomes will pay no monthly insurance premiums next year under federally subsidized health plans to be offered by Blue Cross and Blue Shield of North Carolina.
The state’s biggest insurer announced details Thursday of subsidized plans it will start selling Oct. 1 under the Affordable Care Act. Blue Cross plans to offer 26 subsidized insurance plans in every county in the state.
The release of the plans offers the first comprehensive look at how much health insurance will cost here under the new health care law. It shows that rates for young men will increase, while women and older people likely will see decreases.
Critics had warned that subsidizing insurance would drive up health care costs across the board, but rates in North Carolina and other states indicate that insurance will become affordable for some people for the first time, while others will face steep increases from what they’re used to paying.
Rates in the state vary widely depending on age, income and county of residence.
“There are some people who will wind up getting a plan at no cost,” Blue Cross Vice President Barbara Morales Burke said. “It is complicated, and it is going to affect everyone differently depending on their circumstances.”
Blue Cross is one of just three insurers to offer subsidized plans in North Carolina under the Affordable Care Act, the national health care law enacted in 2010. Coventry Health Care of the Carolinas plans to issue its rates next week, and FirstCarolinaCare, which operates in just six counties, released its plan details last month.
Blue Cross issued its sample rates the same day that the Kaiser Family Foundation released a report comparing subsidized rates from 17 states and the District of Columbia, where subsidized rates have been made public.
The details show that North Carolina’s subsidized rates will be in line with those of states that are promoting the health care law and operating their own health care exchanges, as well as some states that are not. North Carolina officials decided not to cooperate with the federal health care program, leaving federal contractors and volunteers to promote the law and run the health exchange for the state.
‘Kind of interesting’
“These rates are coming in lower than expected, which is kind of interesting because we have less competition,” said Adam Linker, health policy analyst with the N.C. Justice Center. “Given the dire predictions, you see rates that, with subsidies, are certainly within reach of most people.”
Still, even with subsidies, the premiums could amount to several hundred dollars a month for people with moderate salaries. Such costs raise questions about how many people will be able to afford insurance even when factoring in the penalty for not signing up.
Next year the fine will be $95, or 1 percent of income, whichever is greater, and it will increase in future years.
The subsidized policies will be available to more than 1 million people in North Carolina who don’t have insurance coverage through an employer, Medicaid or Medicare.
Blue Cross released a range of premiums for hypothetical 25-, 40- and 60-year-olds. The company did not supply the federal subsidy amounts, which are on a sliding scale based on household income, but they can be calculated online.
The calculations show that at an annual income of $28,725 – which is 250 percent of the federal poverty level – a 25-year-old in North Carolina could see a monthly premium as low as $149.82. At the same income level, a 40-year-old’s lowest premium would be $138.05, and a 60-year-old’s lowest premium would be $76.22.
Kaiser Family Foundation policy analyst Cynthia Cox, who worked on the national rate comparison, said insurers are competing for business under the Affordable Care Act.
“People will have options,” she said. “Insurers see this as an attractive market, and are pricing their plans accordingly.”
The Blue Cross sampling released Thursday doesn’t show how much individuals of different ages would pay other than the three ages specified, or the cost of subsidized insurance rates for couples or families.
Details of specific Blue Cross plans won’t be made public until Oct. 1, when open enrollment begins. At that time, individuals, couples and families will be able to calculate subsidies and compare various health plans.
Premiums and deductibles
The subsidized health plans will distribute annual costs among premiums, copays and deductibles in a variety of combinations. Generally, the lower the premium, the higher the other costs.
The Affordable Care Act limits annual out-of-pocket health care expenses to $6,350 per individual, not including the cost of premiums. Plans with higher premiums typically will have lower annual out-of-pocket expenses than the mandated federal limit.
The health law makes it illegal to deny coverage to someone with a pre-existing condition, to charge women more than men, and to charge older people more than three times the rates charged to younger people.
Federal subsidies will average more than $5,500 a year for families, depending on the number of people in the family and on household income.
The subsidies for premiums will be available on a sliding scale to individuals and families with annual incomes between 100 percent and 400 percent of the federal poverty level. To qualify for subsidies, annual wages must range between $11,490 and $45,960 a year for an individual, and between $23,550 and $94,200 a year for a family of four.
Additional subsidies for deductibles and copays will be available for individuals and families whose income is below 250 percent of the federal poverty level – $28,725 for an individual and $58,875 for a family of four.
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