Will coverage under the Affordable Care Act be ‘affordable’ enough?

The hazy, hot and humid days of summer led me to take some time off from blogging to go camping, and even catch Taylor Swift in concert at Gillette Stadium. Now that the heat wave is past, and cooler days and nights have arrived, it’s time to catch up on recent discussions of health insurance premiums. In July, I had a chance to sit down with Chrissy Centazzo from the PC Public Affairs office to chat about the debut of Rhode Island’s health insurance exchange, HealthSource RI. In recent weeks, President Obama and many state officials trumpetedlower than expected premiums for health insurance offerings under the new health insurance exchanges in states such as California, Maryland, Oregon, Tennessee, and Virginia, among others. Defenders of the ACA argue that premiums will be more affordable for uninsured families, and small businesses and individuals who will purchase coverage through the exchanges. The long term success of the ACA in expanding coverage and controlling costs, however, depends on signing up healthy young subscribers.

Selling the plans, however, will be a challenge. While projected premiums are lower than many forecasts, coverage through the state exchanges is not cheap. As Louise Radnofsky noted, individual premiums for twenty-five year olds who don’t smoke ranged from $117 per month in Tennessee to $156 per month in Baltimore. Will cash-strapped consumers opt to purchase coverage at an annual cost of at least $1400, or will they continue to rely on safety net providers and hospital emergency rooms for care? Since the annual penalty for not purchasing coverage ($95) is less than the cost of one month of the most affordable health insurance on the market, how many healthy young adults will choose to pay substantially more to purchase coverage, particularly when the “Bronze” level plans impose significant cost sharing for newly insured subscribers? As the Fall enrollment season approaches, both supporters and opponents of ACA will weave stories to define the success or failure of the individual mandate. Stay tuned… the debate over ObamaCare has just begun…