Health Insurance

Ohio Health Care Cost Increases under Affordable Care Act

The PPACA, commonly known as ObamaCare, will usher in multiple changes for Ohio residents. ValuePenguin compared costs of current health care insurance plans with proposed PPACA health insurance premiums to estimate the impact for sample demographics of Ohio residents.

January 2014 will usher in multiple changes to health insurance plans for Ohio residents from the Patient Protection and Affordable Care Act (PPACA or ACA), popularly known as ObamaCare. The ValuePenguin analyst team dove through pending health insurance rate tables filed by health insurers with the State of Ohio's Insurance Division to get a preview of what premiums residents could expect. We compared the costs of health insurance today to costs expected under ObamaCare for three sample demographic profiles (27, 40, and 55-year old non-smokers) to give you a sense of how much health insurance costs would increase in Ohio. Unlike some gender neutral states, these premium costs are not the same for men and women as health insurance companies do factor in gender to more accurately price their products.

Summary Highlights

  • People with very cheap existing plans will be forced to upgrade their coverage to substantially more expensive plans. Many of the cheapest insurance policies being sold to individuals today do not offer sufficient coverage to satisfy the essential health benefits outlined in the Affordable Care Act. Existing policyholders will have to choose amongst one of the approved insurance exchange plans for coverage. While the new plans will offer increased benefits and coverage, they will also come at a much higher price when compared to the cheapest options available today.
  • The impact of the ACA will be most noticeable on the young, especially for young men.While all demographics will see their mandated insurance spending rise, the increase in costs varies widely depending upon demographic group. The ratings restrictions implemented in the ACA will most sharply impact young men who will see their required insurance expenditures rise most sharply. Insurance requirements for young men looking for the cheapest options will see their insurance costs increase up to 200%.
  • Examinations of similar AETNA plans conclude that the ACA will raise premiums.
  • Even when we compare plans with similar benefits, in this case an existing AETNA plan that had better deductibles, coinsurance and out of pocket maximums, the post ACA plans had significantly higher premiums.

Better Benefits but Higher Premiums at the Low End

For cheaper insurance plans, it is difficult to make a clean comparison on the impact of the ACA on similar benefits. Many existing plans do not offer the essential health benefits that are required. In our analysis however we illustrate how the impact of the increased benefit requirements and changes to ratings formulas will impact those looking to get insurance on the cheap. The data is displayed as it's currently priced (Pre-PPACA) and how it's proposed to be priced (Post-PPACA) once the law kicks in next year. This comparison is only for consumers wishing to understand how much the minimum amount they must spend on health care coverage (before subsidies) changes with the introduction of new plans and requirements without factoring in the value of additional benefits and coverage.

Cheapest Plan for Men

Age

Pre-PPACAPost-PPACA% Increase

27

$46.81$148.38217%

40

$70.67$180.94156%

55

$142.92$315.72121%

Cheapest Plan for Women

Age

Pre-PPACAPost-PPACA% Increase

27

$60.14$148.38147%

40

$96.10$180.94110%

55

$132.42$315.72138%

A Better Comparison at the High End

Existing insurance plans at the higher cost end of the spectrum are less likely to fail the essential health benefits test. When we look at this data we can more fairly see the impact the ratings restrictions will have on the cost of health insurance. Of particular note is that while young and middle age men see a notable rise in their premiums for the most expensive plans, younger women will experience a much smaller increase in their premiums. Ohio currently allows insurers to charge different premiums for men and women. The ACA forbids the use of such gender ratings in the establishment of insurance premiums.

Most Expensive Plan for Men

Age

Pre-PPACAPost-PPACA% Increase

27

$228.00$383.9068%

40

$296.00$468.1658%

55

$654.41$816.8925%

Most Expensive Plan for Women

Age

Pre-PPACAPost-PPACA% Increase

27

$368.00$383.904%

40

$432.00$468.168%

55

$660.51$816.8924%

Similar Plans Compared

The best comparison we can make is to use similar plans from a single provider, pre and post ACA. For this study we chose the existing Aetna PPO 1500, and the proposed AETNA Premier 2000 PD. Even though the current plan offered by Aetna has lower deductibles, coinsurance and out of pocket maximum, the premiums for the existing plans are still significantly lower than the plans submitted for the 2014 exchanges.

Details

Aetna PPO 1500 (Pre - ACA)Aetna Premier 2000 PD (Post - ACA)

Deductible

$1,500$2,000

Coinsurance

20%30%

Out of Pocket Maximum

$4,000$4,500

27 Male

$220.00$384.70

40 Male

$271.00$469.13

55 Male

$526.00$818.59

27 Female

$368.00$384.70

40 Female

$394.00$469.13

55 Female

$529.00$818.59

Notes:

We've used as a benchmark of pre-PPACA plans, or "legacy" plans, the rates found on online marketplace eHealthInsurance.com. We've chosen 27 as the youngest illustrative age, since under the PPACA, individuals under the age of 26 can be covered in parents' insurance plans. 40 and 55 are chosen as the midpoint for older adults and senior citizens.

Proposed health insurance rates are sourced from filings for individual / major medical plans with Ohio's Insurance Division. For ValuePenguin's prototype Ohio health insurance comparison tool, which is based on the information available in those filings, please visit http://www.valuepenguin.com/ppaca/exchanges/oh.

Jonathan Wu

Jonathan is the CEO and Co-Founder of ValuePenguin. He reports on an array of topics, including the financial services industry, healthcare reform, and financial products for consumers. He previously worked in the financial services industry, including at such hedge funds as Avenue Capital Group.

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