Michigan's new healthcare exchange goes live next Tuesday (October 1), and the White House put out a sneek peak of sorts.
It’s a snapshot of prices Michiganders could pay for what are expected to be some of the most popular plans.
In terms of cost, Michigan is projected to be below the national average.
In general, people in Michigan will be able to shop among four different levels of insurance on the health insurance exchange:
- Gold
- Silver
- Bronze
- Catastrophic
"Platinum" - a level above "gold" will be offered in some other states, but that level might not be offered in Michigan (see below for an explanation).
Here are the preliminary numbers from the White House outlining what Michiganders can expect to pay per month for some of the plans offered on the exchange:
For a 27-year-old with an income of $25,000:
- Lowest Bronze plan, after tax credits: $99
- Second-lowest Silver plan, after tax credits: $145
For a family of four with a total income of $50,000:
- Lowest Bronze plan, after tax credits: $115
- Second-lowest Silver plan, after tax credits: $282
And to calculate what prices might look like for your specific income, age, and family make-up, check out the calculator below from the Kaiser Family Foundation (if the calculator doesn't load for you, follow this link).
So what exactly does all this “bronze, silver, second-lowest” business mean?
To drill down on what it means for Michigan insurance shoppers, we went to Marianne Udow-Phillips.
She’s the director of the Center for Healthcare Research and Transformation.
Before directing CHRT, Udow-Phillips was tapped by former Governor Jennifer Granholm, a Democrat, to head up Michigan’s Department of Human Services.
“The report that was released was just to give people an overall snapshot. But it’s not going to look like what any one person will see when they shop, because they will get a lot more detailed information based on their geography, their income, all those things that are specific to them.”
Here’s how she sees it.
So far, premiums look pretty good
Michigan's premiums stack up relatively well against the national average, says Udow-Phillips.
“What this report tells us when we look at it for Michigan, is that on average, premiums for what people think are going to be the most commonly purchased plans on the exchange…look pretty favorable in Michigan relative to both what we’re looking at for national average costs, and also in comparison to what a lot of employer-paid premiums look like today.”
Of course, not every plan is listed in the White House's early release.
Not by a long shot.
“The report that was released was just to give people an overall snapshot,” says Udow-Phillips.
But it does provide sample prices for four plans, which are ranked as "catastrophic," Bronze, Silver, and Gold.
The amount of coverage you get increases as you move toward Gold.
There’s more: you don’t just select from one Bronze plan.
You can buy, for instance, the “lowest Bronze” level, or the “second lowest Bronze” plan and so on.
What that means for you if…you’re 27 years old
So let’s give this exchange a spin.
Let’s say you’re 27 years old, meaning you can’t be on your parents' insurance anymore.
We’ll call you Josh.
And Josh has a job, but he’s only part time, or maybe Josh’s boss doesn’t offer health insurance.
So Josh makes $25,000 a year, he’s young and healthy, and he’s not looking to pay a lot of money for the Cadillac of health insurance plans.
But then again, Josh does live like a wild man, with all that bungee jumping and climbing sheer cliffs without a harness.
So Josh skips over the Bronze plans and checks out the Silver plans.
If Josh wants to buy the second lowest Silver plan on Michigan’s exchange example, the Obama administration says he’ll pay about $202 a month in premiums.
But Josh also qualifies for a tax credit subsidy too. That would reduce his premiums to $145 a month.
What that means for you if you’ve got a family
On the other end of the spectrum, if you’re a married mom named Shannon with two kids and your family brings in $50,000 a year, you can also buy the second lowest Silver plan for $731.
That goes way down with the tax credit subsidies available to a family. The estimated monthly cost would be $282 a month.
The lowest Bronze plan will be even cheaper for Shannon and her family, at just $80 a month in premiums, but the coverage would not be as good.
But what if you’d like a plan with more coverage, and you’re willing to pay more?
Well, we don’t yet know what a family of four can expect to pay for a Gold plan.
Because this early preview of the exchange doesn’t provide that.
It only offers weighted averages across the state, and it only looks at Bronze and Silver plans.
What it means for you if you’re really sick
Now let’s say Shannon has a chronically ill kid named Ben, and that illness wreaks havoc on his immune system, so Shannon’s family is in and out of the hospital a lot.
And Shannon’s husband has a history of heart attacks, including one in the last year.
Plus, Shannon’s mother, sister, and aunt battled breast cancer.
Shannon may feel she needs to buy a plan on the exchange that offers a TON of coverage.
She’s looking for something that will pay for 90% of common healthcare costs.
Which, when this exchange was first designed, would have meant she’d probably want to buy a Platinum plan.
Here’s the bad news: some, maybe even a lot of Michigan’s insurance companies won't offer platinum plans on the exchange.
It’s because the companies are wary of the cost, says Udow-Phillips.
“Because they’re a little bit concerned, especially with this first foray in the healthcare exchange, that the only people who would sign up for the platinum plans are people who would expect to use a lot of healthcare services, and would be generally sicker than the population at large."
Nobody knows just how many Michiganders will sign up
More than a million people in this state are uninsured.
A good chunk of them will be eligible for Medicaid when that program expands in the spring.
Udow-Phillips projects about 320,000 people will actually enroll in the Medicaid program after the expansion.
That’s “many more people than will initially enroll in the health insurance exchange,” she says.
But that doesn’t mean the rest will all go buy insurance on the exchange.
“We’re projecting that about 120,000 people will get their health insurance on the individual market in the first year.”
But by 2019, it could be that half a million people are on Michigan’s exchange.
That gap will keep closing as awareness and education about the exchange improves, Udow-Phillips says.
She also projects that a lot of employers will take a “wait and see” approach and opt to offer their workers insurance, rather than sending them all onto the exchange.
That picture will look a lot clearer come October 1.
- Meleanie Kruvelis and Mark Brush, Michigan Radio Newsroom
*This post has been updated.
