Subsidies on Healthcare.gov, the federal exchange, reduce premiums by 76% for average and subsidies are available to 87% of recent enrollees. However, the Supreme Court will be deciding the case King v. Burwell in 2015 and, should the plaintiffs prevail, premium and out-of-pocket cost subsidies would be eliminated for approximately 5 million enrollees in the 37 states using the federal exchange as their health insurance marketplace.
Given that bronze plans are the most popular Affordable Care Act insurance for the unsubsidized, HealthPocket examined their premiums and deductibles in federal exchange states to determine which states had the largest insurance costs if subsidies were lost. The combined cost of annual premiums and deductible was highest in the following states:
The top 5 most expensive states had annual premiums and deductibles for bronze plans that were 30% higher than the 5 states with the lowest costs (New Jersey, Oregon, South Dakota, New Mexico, and Montana). The single most expensive state for combined premiums and deductibles, Alaska, was over 60% more expensive than the lowest cost state, New Jersey.
When reviewing premiums alone, New Mexico, had the lowest cost bronze plans among states using the federal exchange. New Jersey, on the other hand, had the lowest average deductible for a bronze plan given its $2,500 deductible limit for individuals.
The average subsidized premium for a federal exchange health insurance plan is $82. In comparison, an entry-level bronze plan costs a 40 year-old nonsmoker $294 a month without subsidies. “A migration to lower cost bronze plans could reduce some of the expense associated with subsidy loss but the premium increase would still be dramatic,” said Kev Coleman, Head of Research & Data at HealthPocket, “These bronze plans have higher out-of-pocket costs than the typical exchange plan selection and cost-sharing reductions would no longer be available if subsidies are eliminated. With that said, it should be remembered that those consumers who don’t qualify for subsidies already face these costs.”