Maryland Health Exchange Rates One Of The Lowest

Maryland Health Exchange Rates are Among the Lowest So Far

According to a report released by the Maryland Health Benefit Exchange, which is in charge of the Maryland Health Exchange, the state’s rates for individual health insurance will be among the lowest of the 12 states that have already released their rates.

Initially, the rates that were submitted by the nine companies that will be offering plans on the Maryland health insurance marketplace were fairly high. However, Maryland is one of 31 states that can deny rate increases based on whether or not they are justified due to the Affordable Care Act’s changes in insurance law.

Maryland’s insurance commissioner reviewed the proposals submitted by the insurance companies and slashed rates by an average of 33 percent of the amounts the insurers requested. In some cases, the rates are 50 percent lower than what was requested. Moreover, the rates do not reflect federal subsidies that 75 percent of uninsured Maryland residents are expected to receive. Approximately 730,000 people in the state are currently uninsured and will be eligible to gain coverage through Obamacare.

Rates Were Initially High for Several Reasons

The insurance companies that are scheduled to offer qualified plans on the Maryland health insurance marketplace initially submitted rates that were high for several reasons. First, under the new law, insurers can no longer deny health insurance coverage to people with pre-existing conditions. The companies believe this will lead to higher medical costs, since sicker and older people will be seeking care for conditions that would have been excluded before Obamacare was passed.

Second, insurers do not know what the ratio of sick to healthy people is going to be. If only sick people take advantage of the coverage opportunities, companies will have to pay out more in claims than they take in through premiums. However, if healthy people also sign up, they could balance out the extra medical costs. Until the results are known, insurers want to hedge their bets by setting higher premiums. In Maryland, however, their attempts were rebuffed when the insurance commissioner forced them to accept lower rates.

Also under ObamaCare all the health plans offered by exchange needs to have minimum essential services covered that could lead to higher costs for insurance companies. These plans will be available for enrollment starting oct 1, 2013. ObamaCare requires that, most Americans are required to have health insurance in 2014, or pay penalty.

Maryland Compared Rates of Other States

Maryland Health Exchange examined rates already proposed or released in 11 other states and found that the state’s rates would be low in comparison. For instance, in New York exchange, a 50-year-old resident would pay $319 for a Silver plan. In Maryland Health Exchange, that same person would pay between $260 and $269 per month, depending on the area in which the resident lives. In Colorado, he would pay $343; in Virginia, he would pay $329; in Ohio, he would pay $374; in California, he would pay $376; in Rhode Island, he would pay $400; and in Washington State, he would pay $392. Only New Mexico’s Silver plan was cheaper.

When comparing Bronze plans, Maryland Health Exchange’s rates were the lowest in all other states where Bronze plans are being offered. A 25-year-old living in Maryland would pay $114; he would pay $134 in Virginia; $163 in Ohio; $167 in Washington State; $146 in Colorado and $174 in California.

Following shows the rate comparison chart for Maryland Health Exchange and various other exchanges.