Countdown to Coverage: What Will It Cost?

///Countdown to Coverage: What Will It Cost?
Working for a Better Texas

By Megan Randall

On Wednesday, the U.S. Department of Health and Human Services unveiled preliminary rates for the Texas Health Insurance Marketplace, scheduled to launch October 1, 2013.  What do these preliminary rates mean for you and your health insurance options?  Below, we’ll walk through a few examples illustrating how actual Marketplace premiums in Texas will vary by region, age, and subsidy level. In a subsequent post, we’ll provide an overview of how rates are set and subsidies are calculated in the Marketplace.

Texas Marketplace Rate Examples

Every individual will have a unique story and characteristics (income, age, region, etc.) that will affect their premiums and subsidy amount.  To get us started, however, let’s walk through a couple examples of what a Texas resident might expect to see in the Health Insurance Marketplace on October 1.

Single 27-Year-Old Houston Resident, Making $28,700 Annually

For this individual, the monthly pre-subsidy rate for the 2nd lowest cost silver plan will be about $201.  At this income level (250% FPL), this individual can qualify for premium tax credits to help reduce their premium.  This resident can expect to receive a monthly tax credit of approximately $8, reducing their monthly premium for this silver plan to roughly $193.  If, however, the individual wants to apply this tax credit to a lower-cost bronze plan, they can!  The after-subsidy cost of the lowest-cost bronze plan would be about $129.

Single 27-Year-Old Houston Resident, Making $15,300 Annually

What if our hypothetical 27-year-old Houston resident has a significantly lower income, closer to 133% FPL?  Larger subsidies become available to those with lower incomes (who are above 100% FPL).  This resident can expect to receive a monthly tax credit of approximately $163 to apply to the pre-subsidy $201 rate, reducing their monthly premium to about $38.  As in the previous example, this person can still apply their tax credit to a lower-cost bronze plan, which would give them a monthly premium of zero dollars.

Single 40-Year-Old Austin Resident, Making $28,700 Annually

For this individual, the monthly pre-subsidy rate for the 2nd lowest cost silver plan will be about $250.  This resident can expect to receive a monthly tax credit of approximately $57, reducing their monthly premium for this silver plan to roughly $193.  If the individual chooses to apply this subsidy to the lowest cost bronze plan, the cost would be about $119 a month.

Single 40-Year-Old Austin Resident, Making $15,300 Annually

This lower-income resident can expect to receive a larger monthly tax credit of approximately $211 to apply to the pre-subsidy $250 rate, reducing their monthly premium to about $38.  As in the previous example, this person can still apply their tax credit to a lower-cost bronze plan, which would give them a monthly premium of zero dollars.

But What Will I Pay?

For additional data and examples, reference our Texas Marketplace Premiums chart (which includes pre- and post-subsidy premiums for individuals at 250% FPL) and our Texas Rates by Income Levels  (which examines premium rates for individuals of varying income levels in Houston).  But first, find out what geographic rating area you are in by referencing this Texas Rating Areas.

You can also use the Kaiser Family Foundation subsidy calculator to get a sneak preview of some of the rates you can expect to see in the Marketplace on October 1.

And don’t forget to go to www.HealthCare.gov on October 1 to find out more about the full range of new coverage options!

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all. CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds to reach their full potential. We dare Texas to be the best state for hard-working people and their families.

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