President Obama and health leaders trying to convince Americans to enroll in health insurance are relying on a message of affordability: After the federal government's tax credits apply, Obama said Tuesday that individuals can get health insurance "for less than their cell phone bill."
In the 36 states where the federal government is operating insurance marketplaces, most Americans will have a choice of at least two health insurers and an average of 53 different health plans, and for some, it may be on a par with their cell phone bills.
The Department of Health and Human Services released pricing data on health plans selling through the federally-facilitated insurance exchange, as President Obama tries to raise public support for enrollment, joining former President Bill Clinton at a conference and visiting a community college in Maryland.
Obama and HHS Secretary Kathleen Sebelius both cited an estimate by an HHS advisory office that more than half of the 41.3 million Americans currently uninsured will be able to enroll in a silver plan for less than $100 per month with premium support, with about 95 percent of the uninsured thought to be eligible for tax credits.
Nationally, the average premium for the second lowest cost silver plan is $328, the HHS Office of the Assistant Secretary for Planning and Evaluation found. There is also a good deal of pricing variation across the 36 states where consumers will use the federally-operated exchange, although HHS officials say the tax credits will largely control the effects in higher priced markets, with consumer costs capped at 9.5 percent of their income.
For a 27-year-old buying an individual silver plan, the lowest average pre-tax credit premiums range from $164 in Arizona and $170 in Pennsylvania to $312 and $324 in Alaska and Wyoming. For a 27-year-old with an income of $25,000, the after-tax credit premium would $145 in all states, except Alaska, a special market where premiums are being set slightly lower, in this case $107.
For a family of four, before tax credits are applied, premiums for the second lowest cost silver plans range from $584 in Tennessee, $600 in Arizona, $634 in Oklahoma and $675 in Pennsylvania, to $789 in Florida, $880 in North Carolina, $949 in New Jersey and more than $1,100 in Alaska and Wyoming.
Nationally the average pre-tax credit price for those second lowest cost silver family plans is $774. A family of four with an income of $50,000 (just above 100 percent of the federal poverty level) would pay $282 for the second lowest cost silver plan with the federal subsidy ($205 in Alaska).
How does that compare to cell phone prices, which may actually be falling due to competition in the smartphone market? The average U.S. cell phone bill was $71 in 2011, according to JD Power and Associates. In one survey, 46 percent of Americans said their monthly mobile phone bill was $100 or more, 13 percent said their monthly bill reached $200 per month, and 20 percent said they spend more on their mobile phone than they do on groceries.
In a media release calling the premiums lower than expected by the Congressional Budget Office, HHS also pointed to the prices young adults could pay in a place like Dallas, Texas. A 27-year-old living in greater Dallas and making $25,000 per year would pay $74 per month for the lowest cost bronze plan -- about what someone might pay for a new iPhone and provider contract -- with a choice of 43 different health plans from 5 insurers.
In some regions of around Dallas, as many 10 insurers are selling individual plans, and most areas of Texas have at least two or three insurers selling. In Florida, many small local markets have only one insurer, while areas around Palm Beach and Miami may have as many as 141 health plan choices from 9 insurers.