Average health insurance premium at $328 before tax credits, report says

With less than a week to go before previously uninsured Americans can sign up for individual health insurance plans online through the Affordable Care Act, the Department of Health and Human Services released a report (PDF) Wednesday with details about the average premium prices in the 36 states that will have federally run health insurance exchanges or will partner with the federal government to run them.

And what the department found is that individually purchased health insurance will cost significantly less than the Congressional Budget Office (CBO) predicted.

The average national premium for the second-lowest-cost "silver" plan -- which covers about 70 percent of medical costs and is the so-called benchmark coverage level from which premium tax credits are calculated -- will cost $328 before tax credits, 16 percent lower than CBO projections.  

What’s more, the report found that consumers will be able to choose from an average of 53 health plans from at least two different insurance companies. Young adults are also able to choose from basic, "catastrophic" coverage plans, which give them an average of 57 plans from which to choose.

States with the lowest premium prices have more than twice the number of insurance companies offering plans than states with the highest premiums, the report said.

“We are excited to see that rates in the marketplace are even lower than originally projected,” said Secretary of Health and Human Services Kathleen Sebelius in a released statement.

About one-fourth of the insurers participating in the 36 federally run or state-federal health care exchanges are new to the individual coverage market, which the report says is a signal that insurers are facing competition and may keep prices low as a result.

The report is far from comprehensive, however, because it doesn’t indicate which insurers are involved in each state’s marketplace, and premium prices are often calculated as averages, meaning that higher-priced plans aren’t necessarily included.

But some states, like Texas, that have expressed reluctance to participate in the ACA -- Sen. Ted Cruz, R-Texas, continued a blistering speech against the 2010 law from late Tuesday night into Wednesday morning -- have particularly low premium rates, according to the report.

A family of four living in Dallas with an income of $50,000 a year, for example, would only have to pay $26 a month for the lowest-cost “bronze” plan after tax credits are calculated. In comparison, a family of four with the same income would pay $106 per month for the same level of coverage in Chicago, $138 in Atlanta and $202 in Phoenix.

And a 27-year-old individual living in Dallas with an income of $25,000 a year would pay only $74 a month for the lowest-cost bronze plan and $139 a month for the lowest-cost silver plan after tax credits are calculated. That's compared with a 27-year-old with the same income living in Atlanta, who would also pay $139 a month for the lowest-cost silver plan but $105 for the lowest-cost bronze plan after taxes are calculated. A 27-year-old with the same income living in Phoenix would also pay $139 for the lowest-cost silver plan but $123 for the lowest-cost bronze plan after taxes are calculated.