How ObamaCare will affect premiums for Springfield residents

Oct. 1 marks the first day of ObamaCare’s open enrollment period. Despite the fact that consumers are expected to start buying plans tomorrow, the state and federal government have been tight-lipped about what will be available on the ObamaCare health insurance exchange. The federal government has begun trickling out bits and pieces about the plans, but...

Oct. 1 marks the first day of ObamaCare’s open enrollment period. Despite the fact that consumers are expected to start buying plans tomorrow, the state and federal government have been tight-lipped about what will be available on the ObamaCare health insurance exchange.

The federal government has begun trickling out bits and pieces about the plans, but has left out many other important details. What will your co-pay be like to go to the doctor or hospital? What will your deductible level be? What’s the cap on your annual out-of-pocket costs? Most important of all: will your personal doctor be included or excluded from the plans offered?

Apparently we’ll have to wait until tomorrow to find out these critical questions. But we have received some early data on premiums. And it’s not looking pretty. Your actual premium will depend on a number of factors, including your age, where you live, your annual income and what plan you ultimately select.

State officials are trying to convince Illinoisans that the policies offered in the ObamaCare exchange are a great deal. According to federal data, a 30-year-old Springfield resident can choose from up to 50 health plans offered by five insurance companies. The cheapest “Bronze” plan has monthly premiums of $167 before subsidies.

Plans available to a 30-year-old, nonsmoking Springfield resident in Illinois’ ObamaCare exchange

But is that really a good deal? After all, that same 30-year-old Springfield resident could go to eHealthInsurance.com today and buy one of 81 different policies in Illinois’ non-group insurance market. Monthly premiums for these policies begin as low as $47 for men and $61 for women. The premiums for ObamaCare’s cheapest Bronze plan are higher than the premiums for 90 percent of the plans available to men and 60 percent of the plans available to women.

Plans available to a 30-year-old, non-smoking Springfield resident on eHealth

Of course, the administration is touting federal subsidies that are meant to help offset some of the costs of buying insurance through an ObamaCare exchange. But in many cases, the premiums will be higher than current rates even after accounting for subsidies. For example, if that same 30-year-old is earning just $25,000 per year, the cheapest Bronze plan will cost them more than the plans available on the market today.

Income at which the cheapest Bronze plan is more expensive than current market rates in Springfield, after accounting for subsidies

And, of course, by accepting the subsidies in Illinois’ ObamaCare exchange, individuals open themselves up to a new tax liability. When the federal government sends subsidies to insurance companies on your behalf, they use your expected income for the year based largely on last year’s income tax return. But if you’re like many Americans, your income isn’t completely stable. In fact, nearly 40 percent of Americans eligible for subsidies in one year are expected to be completely ineligible for them the following year. Many more will see their incomes change, but still remain eligible for at least some benefits.

Every year, individuals who received federal ObamaCare subsidies will have to reconcile the amount they received with the amount they should have received, based upon their actual income. If an individual’s income is higher than expected, they have to pay some or all of the overpayment back to the federal government. For a nonsmoking Springfield resident, the amount an individual must repay could total more than $7,000 per year.