Average monthly premiums for health insurance purchased through the Obamacare Insurance Marketplaces will be about 16% lower than expected before the law was enacted, according to a Department of Health and Human Services (HHS) report.
In a press release issued on Sept. 25, HHS Secretary Kathleen Sebelius said that exclusive of Obamacare tax credits, the average premium payment for a mid-range coverage plan purchased through one of the Marketplaces will be $328 a month for an individual.
Insurance plans sold through the Marketplaces come in four minimum coverage levels: bronze, silver, gold and platinum. While bronze and silver plans offer lower monthly premiums, their out-of-pocked co-pay costs for things like doctor visits and prescriptions will be higher.
For qualifying low-income individuals and families, Obamacare tax credits and subsidies will greatly reduce monthly premiums and help with out-of-pocket costs.
For example, Sec. Sebelius noted that a 27-year old living in Dallas who makes $25,000 per year will pay a premium of $74 per month for the lowest cost bronze plan and $139 per month for the lowest cost silver plan, taking into account tax credits. Tax credits for monthly premiums will be calculated by the Marketplace based on the applicant's income and paid directly to the insurance company.
Taking the tax credits into account, premiums for qualifying low-income families can be even lower. According to Sebelius, for a family of four in Dallas with a total income of $50,000 per year, the lowest cost bronze plan would cost only $26 per month, taking into account tax credits.
The HHS report, Health Insurance Marketplace Premiums for 2014, projects that 6 out of 10 people who are currently uninsured will be able to find coverage for $100 or less per month in the Marketplace, taking into account premium tax credits and Medicaid coverage.
"We are excited to see that rates in the Marketplace are even lower than originally projected," said Secretary Sebelius. "In the past, consumers were too often denied or priced-out of quality health insurance options, but thanks to the Affordable Care Act consumers will be able to choose from a number of new coverage options at a price that is affordable."
In its analysis of Obamacare -- The Affordable Care Act - issued before Congress passed the bill, the non-partisan Congressional Budget Office had projected that the average premium nationally for the second lowest cost silver plan sold through the Insurance Marketplaces, not taking tax credits into account, would be $380 a month, 16% higher than the $328 now projected by the HHS.