Starting Tuesday, dozens of health insurance plans will be offered on the Texas exchange created by federal healthcare reform, with average premiums below the national level, the government announced Wednesday.The U.S. Health and Human Services Department said Texas residents can choose from an average of 54 plans, with the exact number depending on where they live. All 26 of the state’s regional markets have at least two insurers, and most have three to five, according to the agency.In North Texas, consumers will have 43 plans to choose from. Austin has 76 plans in its exchange, and Houston has 46. The plans are being offered online by private insurers that meet the federal standards for various benefit levels.Under the Affordable Care Act, also known as Obamacare, exchanges in all states will offer four basic plans with escalating levels of coverage — bronze, silver, gold and platinum. People under 30 can also choose a “catastrophic” plan.The goal is to provide affordable choices for the uninsured, with government subsidies to help low-income families and individuals. Texas has the nation’s highest rate of uninsured residents — 24.6 percent. Under the law, individuals must have health insurance starting Jan. 1 or face a small penalty that will grow in later years.“We are excited to see that rates in the Texas Marketplace are even lower than originally projected,” Health and Human Services Secretary Kathleen Sebelius said in a prepared release. “In the past, consumers were too often denied or priced out of quality health insurance options, but thanks to the Affordable Care Act consumers will be able to choose from a number of new coverage options at a price that is affordable.”Texas, like 26 other states, opted to let the federal government operate the Health Insurance Marketplace, as the exchange is formally known. Open enrollment lasts from Tuesday through March 31, and policies take effect starting Jan. 1.The online exchange itself is not yet active but is expected to be in operation by Tuesday. Its Web address is www.healthcare.gov, which serves all the states where the federal government is either operating the exchange or supporting it in cooperation with the state.Statewide, the lowest-cost bronze plan for all Texas markets averages $211 per month for an individual. The lowest-cost silver plan averages $287 a month. That compares with average U.S. premiums of $249 for the lowest-cost bronze plan and $310 for the lowest-cost silver plan.Tax credits are governed by a sliding scale based on income and can reduce those costs considerably. The credits can be paid directly to the insurer, reducing the consumer’s immediate out-of-pocket cost.Subsidies apply to households with 2014 incomes of 100 to 400 percent of the federal poverty level. This year, that’s between $11,490 and $45,960 for an individual, and between $23,550 and $94,200 for a family of four.Kaiser Family Foundation, a nonpartisan health policy researcher, has an online calculator that can estimate tax credits and premiums. It is at http://kff.org/interactive/subsidy-calculator/Health and Human Services offered estimated premiums for two types of consumers — a 27-year-old earning $25,000 a year, and a family of four with income of $50,000 a year.In North Texas, the 27-year-old would pay $74 a month for the lowest-cost bronze plan after tax credits. That person would pay $145 a month for the next-highest silver plan, the level the government is using as a standard for calculating the subsidy. Without the subsidy, that plan would cost $223 a month.The family of four in North Texas would pay just $26 a month for the lowest-cost bronze plan after tax credits. The second-lowest silver plan would cost $282 a month with the tax credit but $727 without it.“That’s a very good amount of choice available to people in Texas,” Gary Cohen, deputy administrator and director of the Centers for Medicare & Medicaid Services’ center for consumer information and insurance oversight, said on a conference call. “The rates in Texas are looking good.”That’s something of a surprise, said Larry Levitt of the Kaiser Family Foundation. “That is a state that has put up roadblocks to implementation, but the premiums there are below average.” Ross Carmichael, vice president of compliance and operations for Fort Worth-based Higginbotham, said the employers and insurance agents his company works with are eager to see specific plans and prices rather than averages. Higginbotham bills itself as one of the nation’s largest insurance brokerages.“Without the full gamut of plans and rates, we can’t tell” exactly how premiums on the exchange compare with existing rates, Carmichael said. For example, he said, a 27-year-old in Fort Worth can buy a policy roughly equivalent to a silver plan for $159 a month, which is lower than the unsubsidized price on the exchange.He thinks younger people will see higher rates because of federal rules that narrow the price differences that insurers can charge between young and old. And that could be a problem, because “enrolling young people is what will make this work,” since their relatively low medical spending offsets higher expenses for older people.“A lot depends on the tax credit,” Carmichael said.Cohen said exact details of the Texas plans — such as precise costs and participating insurers — won’t be available until Tuesday.He said Texas has historically had a reasonably competitive insurance market compared with some other states. He explained that while in some states, one insurance carrier may dominate 75 to 80 percent of the market, “Texas has not had that situation.”According to Texas Department of Insurance data, Blue Cross Blue Shield is the state’s largest health insurer, writing 31 percent of premiums in the state in 2011. UnitedHealthcare, with 15 percent, was the only other insurer with more than 10 percent of the market.The exchange’s policies often come with higher deductibles, the amount the consumer must pay out of pocket in a year before insurance kicks in.The annual deductible for a midrange silver plan averaged $2,550 in a sample of six states studied by Avalere Health. That’s more than twice the typical deductible in employer plans, Avalere said.Avalere also found that the new plans will require patients to pay a hefty share of the cost — 40 percent on average — for certain pricey drugs, like the newer specialty medications used to treat chronic diseases such as rheumatoid arthritis and multiple sclerosis. On the other hand, preventive care will be free. “Consumers will need to balance lower monthly premiums against the potential for unpredictable, expensive out-of-pocket costs in plans with higher deductibles,” said Caroline Pearson, a vice president of the private market analysis firm. “There is a risk that patients could forgo needed care when faced with high upfront deductibles.” Responding to the Avalere study, the Obama administration acknowledged that the new plans aren’t as generous as employer coverage but said they nonetheless represent a big improvement over current individual policies, which can have coverage gaps and even larger out-of-pocket costs.When the state’s exchange launches, not everyone will be able to buy insurance through it. People eligible for Medicare or Medicaid cannot, nor can illegal immigrants.Others can buy insurance through the exchange but might not be eligible for subsidies.That includes people in households with incomes of more than four times the federal poverty rate, as well as workers whose employers offer affordable health benefits. To be considered affordable, the employees’ share of employee-only coverage can be no more than 9.5 percent of household income.One mandated feature of plans offered on the exchange is their minimum level of coverage, called Essential Health Benefits. All, except the catastrophic plan reserved for young people, include preventive care, maternity and pediatric services, lab tests, prescription drugs, outpatient, inpatient and emergency hospital services, rehabilitation treatment and mental/behavioral health treatment. This report includes material from The Associated Press.
Jim Fuquay, 817-390-7552 Twitter: @jimfuquay