SANTA FE, N.M. (AP) — The cost of medical coverage plans available through New Mexico’s health insurance exchange likely will be lower than in many other states, according to a new national study.
The state’s insurance regulator also said uninsured New Mexicans will find more health insurance options through the exchange than currently are available through the private insurance market. For people who qualify for federal subsidies to buy their insurance, premiums will typically be lower than current market rates, according to State Insurance Superintendent John Franchini.
For consumers who qualify for the Patient Protection and Affordable Care Act (PPACA) tax credits, the consumer’s share of the premium will be very low, and carriers will have a hard time beating the exchange plans’ subsidy-adjusted prices, Franchini said.
“That’s the fact that might drive a lot of people to the exchanges,” Franchini said.
The exchange is to serve as an online shopping center for buying insurance from private companies, and about 83,000 uninsured New Mexicans are expected to enroll next year.
PPACA requires exchanges to begin enrollment Oct. 1 and be fully operating in January. New Mexico initially plans to use a federally operated exchange to enroll individuals and a state-run system for businesses.
A study released this week by the Kaiser Family Foundation reviewed insurance premiums proposed to state regulators for exchange plans in the District of Columbia and 17 states, including New Mexico.
Franchini said the New Mexico rates submitted by five insurance companies will be very close to what regulators will soon approve.
“This is the first time in many, many years that we’ve had five insurance companies actively writing business in the individual markets,” Franchini said. “It’s really been only two. We’ve been very, very lucky to have more competition.”
Consumers will be able to pick from insurance plans with a range of coverage called bronze, silver, gold and platinum. The least costly or bronze plans will require people to pay more out-of-pocket expenses. The cost sharing of medical expenses is less with other plans, but premiums will be higher.
According to the study, the lowest cost bronze plan in New Mexico for a 40-year-old in Albuquerque is $155 a month. That’s lower than in other states except Maryland, where it would cost $146 a month for a similar individual in Baltimore.
Premiums will vary among states because of differences in health care costs, insurance regulation and market competition, the study said.
Costs also will vary depending on a person’s age and within different regions of a state. Franchini said premiums will be lower in Albuquerque because it has more health care providers and greater competition. Premiums will be higher in rural areas and in smaller communities such as Silver City or Farmington, he said.
Bronze plans are to cover about 60 percent of health care costs on average, with 70 percent coverage for silver plans. Franchini estimated most plans purchased in the private marketplace cover an average of 50 percent of costs.
The federal subsidies are based on the second-lowest-cost silver plan in a local area. The silver plan would cost a 40-year-old in Albuquerque $212 a month before any tax credits are used. The study said that’s lower than in all but Oregon, where a 40-year-old in Portland would pay $201 monthly. On average nationally, the premium for a similar consumer is estimated at $320 a month.
Federal tax credits will be available to people with incomes from about $24,000 to $94,000 annually for a family of four. In New Mexico, the study estimated subsidies would drop the monthly premium of the second-lowest-cost silver plan to $193 from $212 for a 40-year-old in Albuquerque. The lowest unsubsidized silver plan premium for that consumer is $189 a month.