Thursday, October 10, 2013

Health Exchanges: employer insurance vs. exchanges, an example

One of the neat things about watching the major parts of the Affordable Care Act roll out over the past few weeks has been experience it both as a wonk-nerd/scholar and on a personal level. It's a good reminder that policy-making isn't just this thing that exists way out in Washington, but something that profoundly affects all of our lives, for better or for worse.

After a week of waiting out the initial craziness, I ventured on to last night to start pricing out options. I haven't signed up for anything yet, or created a formal application. I also suspect the prices will shift slightly to reflect my personal age instead of the large band the basic information section asks for. We'll see what happens when I navigate that part of the process.

Those caveats aside, the prices are a thing of beauty.

In Harris County, I have the option of 12 Bronze plans, 12 Silver plans, 12 gold plans and one platinum plan.

The Bronze plans run from $137 a month to $214 a month.
The Silver plans run from $195 to $256 a month.
Gold plans run from $233 to $312 a month.
The Platinum plan checks in at $283 a month.

Each plan has some differences as to what it covers and how it handles co-pays. They also have considerably different network types and sizes.

But these are EXTREMELY competitive prices.

Let's compare to the University of Michigan's employer-offered insurance. I suspect that most of these plans are probably on a Gold level, but at the very least they are on a Silver.

Premier Care: $511
HAP: $567
Blue Cross/Blue Shield: $597
Comprehensive Major Medical: $468
Grad Care: $239

All of these figures are for single people, and do not include UM's employer contribution or any subsidies on the Federal exchanges -- it's the full monthly premium. For example, employees on Premier Care who earn less than $50,000 pay $32 a month, while based on my 2013 income (assuming I make the poverty line), I would get roughly $185 in federal subsidies to spend on insurance every month, meaning I would pay about $20 for the second-lowest Silver plan.

One factor that makes UM plans look a bit less competitive is that the covered risk pool is older thn the price quoted for 34-year-old me on the exchanges, which will raise UM's prices somewhat. However, it's heartening to note that the exchange plans are still fairly competitive even with Grad Care, which covers Graduate Student Instructors and Graduate Student Research Assistants and is essentially Premier Care with a much healthier risk pool and a constrained network.

It's amazing what a bit of regulated competition will do to a dysfunctional individual insurance market. There are still demons lurking in the details (one of which I'll discuss tomorrow), but this Obamacare thing looks like it's going to work.


  1. I hope you are right. I too am going to have use Obamacare(if I don't get a job) and while my prices in New York are going to be a little bit higher, I agree it has lowered the cost of insurance enough and with good benefits that insurance is now within many more peoples grasp.

  2. I hope I'm right too. Good luck with your job search!