By Chris Hoenig
New York has become the latest state to offer up proof that the Affordable Care Act is working. Governor Andrew Cuomo announced this week that state regulators have approved a structure for 2014 health-insurance premiums that will drop some rates in the Empire State by more than 50 percent.
Under the plan, New York City residents who buy their own insurance and now pay $1,000 a month or more for coverage can sign up starting in October for plans that run as low as $308 a month. That cost is calculated before applying federal subsidies, which can lower the cost even more for those making up to 400 percent of the poverty linean annual income of $23,000 for individuals and up to $92,000 for a family of four.
Only about 17,000 New Yorkers currently purchase health insurance on their own, a number that has shrunk as the cost of individual premiums has soared over the past two decades. Another 2.6 million in the state are uninsured and will be entering the marketplace next year.
North ShoreLIJ Health System (one of DiversityInc’s Top 10 Hospital Systems) has been approved to offer plans to both individuals and businesses for the first time. It joins Aetna (No. 19 in the DiversityInc Top 50) and WellPoint (No. 40) among the 21 insurers with individual coverage plans approved by the state.
President Obama acknowledged the savings at a White House event on Thursday, while announcing that $500 million in rebates are being paid out by insurance companies this year as part of the law. “Generally speaking, what we’ve seen is that healthcare costs have slowed drastically in a lot of areas since we passed the Affordable Care Act,” the president said. Insurance companies have to spend 80% of every dollar on medical care or quality improvement or reimburse the difference through the rebates.
He also addressed the ongoing efforts by House Republicans to repeal the law. “I recognize that there are a lot of folks, in this town at least, who are rooting for this law to fail,” the president said. “What I’ve heard is just the same old song and dance. We’re just going to blow through that stuff.” The House has voted more than three dozen times to repeal, limit or defund the Affordable Care Act, including a vote this week. Those efforts have been ignored by the Senate.
Other States Seeing Results
In the past two months, states including Oregon, Montana, California and Louisiana have put together plans with rates that are lower than expected.
Regulators in Oregon slashed proposed rates by upward of 35 percent last month. This cut follows requests by companies in May to resubmit lower rates, a byproduct of the competition created when each company’s proposals were released to the public. About half of the state’s individual purchasers are expected to qualify for federal subsidies to further lower costs.
In Montana, premiums are expected to either hold steady or drop slightly for those buying in the individual marketplace, and will be lower than they would have been without the Affordable Care Act. Officials say buyers are likely to get more coverage for less money than they had in the past.
Covered California, which runs the marketplace exchange in the Golden State, will be offering 13 plans that carry premiums lower than had been expected. Up to 5.3 million Californians will be eligible for coverage, with 2.6 million of them qualifying for federal subsidies. In addition to the amount of coverage, premiums will also vary based on region.
Louisiana insurers estimated this month that two-thirds of individual buyers will pay no more than they are now if they take advantage of the federal subsidies. There are about 76,000 households that purchase their own insurance in the state, and some companies estimate that upward of 37 percent of them will qualify for the subsidies. The federal government will manage the exchange for the state.
Culturally Competent Healthcare
The Affordable Care Act is expected to add 32 million previously uninsured Americans to the rolls of health-insurance companies nationwide, including large numbers of low-income Blacks and Latinos. The additional coverage is intended to provide easier access to preventative care and screening, like mammograms and colonoscopies, and will likely help close disparities in death rates from cancer.
Members of the healthcare industry should begin preparing now for the influx of patients that are expected to arrive as a result of the new legislation. A key to successful implementation for hospitals and healthcare providers will be the ability to provide culturally competent care and connect with the communities they serve in a cost-effective manner.
DiversityInc has assembled a renowned group of industry leaders to share insider tips and real-time advice exclusively at our upcoming summit Culturally Competent Healthcare: How Diversity Creates Better Patient Outcomes on Sept. 24, 2013, in Newark, N.J.