Maine marketplace rates exceed national average

AUGUSTA (AP) — The costs of plans being offered on Maine’s health insurance marketplace are among the highest in the country on average before tax credits for lower-income individuals and out-of-pocket costs are factored in, according to a federal report released Wednesday.

Maine residents will pay an average of $403 a month for a mid-range insurance plan before tax credits, which some low-income families will get as an upfront discount, according to the report from the U.S. Department of Health and Human Services. The marketplaces, also known as exchanges, are a signature part of President Barack Obama’s health care overhaul and open for enrollment Tuesday.

Maine’s average is higher than the national average of $328 and puts the state tied with Indiana for sixth-highest out of 47 for which data was available.

Trish Riley, adjunct professor in health policy at the University of Southern Maine, said the report is no surprise as Maine’s health insurance costs have always been considerably higher than the rest of the country.

“You’ve got 1.3 million people in a geography that the rest of New England fits in,” said Riley, who directed the Office of Health Policy and Finance under former Democratic Gov. John Baldacci. That’s always made health delivery costs in Maine expensive, she said.

Premiums also tend to be higher in states where fewer insurers are offering coverage on the exchange, the report found. Only two companies, Anthem Blue Cross Blue Shield and Maine Community Health Options, are offering plans on Maine’s marketplace, while eight insurers on average are offering coverage in the 36 states where the federal government is taking the reins on the exchange.

Both Anthem Blue Cross Blue Shield and Maine Community Health Options are offering gold, silver and bronze plans on Maine’s marketplace. Gold plans generally have higher premiums but cost less for each doctor visit while bronze plans have lower premiums but cost more every time a person seeks care.

The sticker price for a mid-range insurance plan known as the second-lowest-cost silver plan is $265 a month on average for a 27-year-old Maine resident with an annual income of $25,000, according to the report. After tax credits, that person would pay only $145 in monthly premiums. The person can also choose a bronze plan for just $96 a month on average after tax credits.

Premiums will also vary greatly depending on income, age, tobacco use and residence. For example, rural Maine residents can generally expect to pay significantly more for coverage than city dwellers.

Riley said it’s important to remember that many Mainers will qualify for federal subsidies, greatly reducing their out-of pocket costs. People who make between 100 percent and 400 percent of the federal poverty level — or up to $80,000 a year for a family of four — can qualify for those discounts.

The new plans also significantly differ from what’s currently offered in the individual marketplace with more consumer protection and less out-of-pocket costs, Riley said.

“You have to look at the value of what you are buying, not just the premium cost,” she said.

As many as 250,000 Maine residents could use the new exchange, including about 130,000 people currently uninsured. But the state expects that many people will choose plans off the exchange or remain uninsured.

Republican Gov. Paul LePage opted to let the federal government run Maine’s exchange, instead of having the state take the lead, which means the state received considerably less money for things like marketing and advertising.

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