Obamacare premiums: not so high after all

If you pay attention to political news, you've probably been treated over the spring to dire predictions of "rate shock," the supposed sky-high health insurance premiums to be inflicted on Americans starting in 2014, when the new health care law starts requiring everyone to have health insurance or pay a fine.

Those predictions are turning out to be a bit off the mark. In the 11 states where 2014 health insurance premium information is available, the average price for a plan with a middle range of benefits is coming in at $321 a month, 18 percent lower than the impartial Congressional Budget Office estimated it would be, according to a report released today by the U.S. Department of Health and Human Services. The chart above, taken from the report, gives state-by-state details.

Even better, these premiums are for much better coverage than consumers can purchase on the individual market in most states today. For instance, they must all cover mental health care, maternity care, and prescription drugs, essential health benefits that are absent from a lot of plans being sold to individuals today, pre-reform.

Best of all, the vast majority of people buying these plans through their state's new health insurance Marketplace (they're opening for business Oct. 1 nationwide) will receive a break on costs in the form of a new kind of tax credit that they can use right away to offset part of the premiums. Learn more about the Marketplace and tax credit in our new brochure.

For healthy young adults, who have the highest uninsurance rate of any age group and the lowest awareness of the coming reforms, premiums will be even lower. That's because the law allows younger adults to be charged lower premiums than older customers pay. In Los Angeles County, which according to HHS has more uninsured people than any other county in the country, a 25-year-old can purchase one of these mid-range plans for $174 a month, before subsidies. If that 25-year-old has an income of $17,235, subsidies will bring the cost down to only $34 a month.

If you want to read the whole report, you can find it here.