Obamacare tax credits cut insurance costs for Kansas City area buyers

06/17/2014 7:01 PM

06/18/2014 12:39 AM

Health insurance bought on the federal health insurance marketplace for 2014 cost buyers an average of $59 a month in Missouri and $67 a month in Kansas, according to new data released today.

The U.S. Department of Health and Human Services said income tax credits for eligible buyers — offered through the online federal site — cut the average premium cost from $344 in Missouri and from $290 in Kansas.

Eligible consumers in the Kansas City area were able to select health insurance coverage on the online federal marketplace. Missouri and Kansas were among states that did not establish state sites for private insurers to offer plans.

Blue Cross and Blue Shield and Coventry/Aetna offered plans in Missouri and Kansas. Plan types were categorized as bronze, silver, gold and platinum, with platinum being the highest cost with the broadest coverage.

The most popular plan in both states was a silver plan. Silver premiums averaged $45 a month in Missouri and $50 a month in Kansas after the federal tax credits were applied.

Federal officials said Tuesday that 77 percent of plan purchasers in Missouri had premiums of $100 a month or less after their federal tax credits were calculated and 57 percent had monthly costs of $50 or less. The tax credits dropped total costs by an average of 83 percent.

Similarly, 75 percent of Kansas enrollees with tax credits had premiums of $100 a month or less and 52 percent had monthly costs of $50 or less. Total premiums fell 77 percent because of tax credits.

The income tax credits, based on family income, were a centerpiece of the Affordable Care Act, also known as Obamacare. The credits were designed as an enticement for people to buy health insurance and meet the act’s individual coverage mandate.

The government said tax credits reduced effective costs nationally to an average of 76 percent of the full premium costs — down from $346 to $82 a month.

The health care act uses a silver plan as the benchmark to specify the percentage of individual or family income that must be used to pay for their health insurance bought on the marketplace. It also uses the official federal poverty level as a basis for calculating tax credit eligibility and amounts.

The report said 266 issuers — insurance providers — offered marketplace plans nationally, ranging from a low of one issuer each in New Hampshire and West Virginia to a high of 16 issuers in New York.

On average, consumers shopping for plans on the federal marketplace had 47 plans to choose from, given that each issuer offered various coverage levels.

Zeroing in on the second-lowest-cost silver plan, the Health and Human Services report also published the average cost variations for plans nationally, depending on buyers’ ages. Excluding Vermont and New York, which prohibit age-based ratings, the average monthly premiums before tax credits were $219 for 27-year-olds, $254 for 35-year-olds, $266 for 40-year-olds, $371 for 50-year-olds and $584 for 60-year-olds.

To reach Diane Stafford, call 816-234-4359 or send email to stafford@kcstar.com.

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