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West Virginians likely to face higher-than-average premiums in reform

West Virginians signing up for health plans in the new Health Insurance Marketplace will likely pay monthly premiums higher than national averages, according to data released Wednesday from the U.S. Department of Health and Human Services.

Officials blame the higher costs in part on the fact that only one company - Highmark Blue Cross Blue Shield of West Virginia - has opted to participate in the exchange, which is set to open enrollment Oct. 1.

The marketplaces were established under the Patient Protection and Affordable Care Act to help uninsured Americans purchase health care plans. Individuals and families with household incomes between 100 and 400 percent of the federal poverty level can also receive tax credits to offset the monthly premium cost.  

Plans will be divided into four categories - bronze, silver, gold and platinum - with the bronze plan featuring lower premiums but a higher deductible, co-pays and other out-of-pocket expenses. Premiums will rise and expenses will fall as consumers choose which level of coverage they prefer.

On Wednesday, Department of Health and Human Services released a report detailing average premium prices consumers can expect in the exchange. The report said average prices were 16 percent lower than the Congressional Budget Office originally estimated.

The health department report analyzed average monthly premium rates for the 36 states where the federal government is either completely operating the exchange, or managing it in partnership with the state. It also summarized the average overall premiums for 47 states and the District of Columbia.

West Virginia has opted to partner with the federal government to manage its exchange. Beginning Oct. 1, consumers will be able to log on to www.healthcare.gov and compare and apply for one of 13 qualified health plans in the exchange. 

The average monthly premium for the lowest-cost bronze plan will be $280 before any applicable tax credits, the report said. The lowest-cost silver plan will be $331.

The state rates are higher than the national average for each plan. According to the report, the national average for the lowest-cost bronze plan is $249, while the lowest-cost silver plan is $310.

Premium rates will still vary widely, depending on the number of people on the plan, their ages, whether they smoke and if they qualify for any tax credits.

A 27-year-old West Virginian looking for individual insurance could pay $185 a month for the lowest bronze plan, if they did not use tax credits. If that person made $25,000 a year, the plan price would fall $112 a month after tax credits.

Both rates are still higher than the average rates for the 36 states in which the federal government is helping to manage the marketplace. The lowest cost bronze plan averages $163 before tax credits, while the premium falls to $93 after factoring the credit for an individual making $25,000 a year.

Not every premium was higher than the average, however.

A West Virginia family of four with annual household income of $50,000 would pay a $282 premium for the second-lowest cost silver plan, according to the report. That is in line with the $282 average from the 36 other states.

The report said premiums tended to be lower in states where there was more competition and transparency in the exchange.

"In the 36 states included in this analysis, states with the lowest average premium tend to have a higher average number of issuers offering qualified health plans," the report said.

Most West Virginians will be able to choose one of 12 qualified Highmark plans, once enrollment begins Oct. 1. Some younger individuals will also be able to purchase a baseline catastrophic coverage plan through the exchange.

That leaves the state with far fewer choices than most other parts of the country.

West Virginians are among just 5 percent of the national population that will have fewer than two health insurance issuers to choose from in the exchange.

The report said in the 36-state region where the federal government is helping to run exchanges, the average individual or family will be able to choose from 53 plans from 8 issuers.

Perry Bryant, executive director of West Virginians for Affordable Health Care, said he was disappointed that no other insurance providers chose to participate in the state's exchanges.

While he didn't think that fully accounted for the state's higher-than-average exchange premiums, he does believe it was a factor.

"That clearly had some impact," Bryant said.

He said the state's smaller population and poorer health statistics also factored into the costs.

Though he didn't think there is one single factor that can drive down costs, Bryant said the state's health care providers should examine their quality of care and make sure they are doing the most they can to control expenses.

"In general people have this belief if you spend more, you get higher quality health care, and sometimes that's not true," he said. "We need to examine that and put more emphasis on primary and preventative care to hold down costs."

Bryant also said the data offered Wednesday by the federal government represented just a small portion of the potential rates consumers could see Oct. 1.

He said a key factor for consumers would be seeing how much their premiums would be reduced by potential tax credits.

The amount of those tax credits based on the percentage of annual income an individual or household has to spend on insurance premiums. 

Since the amount of the credit will vary depending on people's incomes and the plans they choose, Bryant cautioned against using the Wednesday report to make a full judgment about the exchange.

"I would caution people to wait until we actually see the rates that are approved and how those credits may apply to them," he said. "This gives us some idea, but I don't think it gives us enough concrete data to begin to make decisions."

Contact writer Jared Hunt at business@dailymail.com or 304-348-4836.


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