What will Affordable Care Act actually cost through the State Exchanges?

As the Affordable Care Act moves closer to full implementation, the real test is soon to begin. As state insurance exchanges prepare for open enrollment in the fall of this year, premiums for various levels of coverage are starting to take shape. Most eyes are on the State of California as it is as close as any state to publishing hard rates.  Despite the political arguments that continue on Capital Hill, there still remains much confusion over where the rates will wind up. The following articles, one from Forbes, and one from the Covered California website depict two entirely different scenarios. The Covered California article compares rates and shows that rates on average will be between 2% higher and 29% lower through the Exchange.

The next article from Forbes points out that the comparisons are not apples to oranges and that the real comparison would show an increase through the exchange of up to 146%. 

It’s amazing that even with hard numbers there doesn’t seem to be a consensus on the true cost.  In the actuarial universe, there are several factors that determine what insurance rates are required to support specified coverage.  Two of the more important factors in rate determination are average age of insured and the total size of the group covered.  As stated in a prior blog, these two issues are going to be the impetus behind a push in the second half of the year to advertise and enroll as many younger adults as possible. Although the implementation of ObamaCare has continued its march, there could still be a few legislative hurdles before full implementation. In the world of politics, expect the unexpected.