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GAO creates health insurance price benchmark

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A year ago – before major Patient Protection and Affordable Care Act health insurance underwriting and pricing rules took effect – carriers sold 617 plans to working-age adults in California.

Annual base rates for a single, 19-year-old, nonsmoking male ranged from $672 to $11,664, with a median premium of $1,704.

Carriers sold just 120 individual plans in New York state, and that same 19-year-old male could pay anywhere from $1,986 per year to $24,324, with a median annual premium of $5,750.

Texas carriers offered the 19-year-old male 5,422 plans, with an annual premium ranging from $363 to $4,790 and a median of $1,203.

Analysts at the U.S. Government Accountability Office have published those figures – and similar sets of data for all other states and the District of Columbia – in an individual health insurance price benchmarking report prepared at the request of Sen. Orrin Hatch, R-Utah.

The analysts looked at figures only for 19-year-olds and 64-year-olds. Because of PPACA pricing rules, coverage for adults ages 19 to 64 are now roughly equal to the coverage price for a 19-year-old times a multiple based on the insured’s age. 

Hatch asked the GAO to develop a report to give policymakers a tool for analyzing the effects of PPACA and other policy initiatives on individual health insurance prices.

In addition to looking at the base price for several types of single 19-year-olds, including male and female smokers and nonsmokers, the GAO analysts collected the same sets of information for four different types of 64-year-old consumers.

The analysts gathered data on annual deductibles, out-of-pocket maximums and coinsurance percentages for the individuals in addition to the premium amounts.

In Texas, for example, a 19-year-old who was paying $363 per year for medical insurance would get a plan with a $10,000 annual deductible, a $17,500 out-of-pocket maximum and a coinsurance rate of 50 percent.

The GAO was not sure what the cost-sharing terms were for the highest-cost policy in New York.

The 19-year-old male nonsmoker who had the highest-cost individual policy in California would get a plan with a $2,000 deductible and a $3,000 out-of-pocket maximum.

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