Consumers to wait for insurance marketplace rates

Published: Wednesday, Sept. 11, 2013 11:04 p.m. CDT

CHICAGO – With less than three weeks left until a key launch date for the nation’s health care law, Illinois residents planning to shop for health insurance on a new online marketplace still don’t know which companies will offer plans or what the policies will cost.

The uncertainty is vexing business owners, the self-employed and others who want to create their budgets for 2014. Heightened speculation and political spin are also in the air as other states release their rates, with Republicans stressing increases compared to some current rates and Democrats crowing about subsidies many consumers will get.

Illinois residents likely won’t know more about policies and pricing until the Web-based marketplace opens Oct. 1, according to federal officials who addressed a group of health professionals and other stakeholders this week without explaining precisely why.

More than a dozen other states have released their prices, but Illinois officials are waiting for final word from the federal government. Washington is controlling most of the important aspects of the state’s marketplace because Illinois didn’t move fast enough to set up its own exchange.

Under President Barack Obama’s health law, almost all Americans will be required to have health insurance in 2014 or face fines, and insurers will be prohibited from turning away people because of poor health. The marketplaces, one for every state, are a key part of the law.

The coverage offered on the marketplaces, which are supposed to be one-stop sites for easy comparison shopping and enrollment, will start Jan. 1. About 700,000 Illinois residents will be eligible for aid in paying for marketplace-bought health insurance. Another 600,000 Illinois residents will be newly eligible for Medicaid, the state-federal health program for the poor.

Small business owners and individuals are frustrated with the lack of disclosure, according to Illinois insurance brokers who spoke to The Associated Press. Chicago insurance broker Sean Whaley said his self-employed clients are frustrated they can’t plan ahead for their families’ health care costs in 2014.

“The whole thing is ridiculous,” Whaley said. “They’re trying to plan their finances and nothing’s set in stone at all.”

Small business owners want to provide detailed price information to employees in federally required notifications about the marketplace, Pekin insurance broker William Shock said. Those notices will spur employees to raise questions that the employers can’t answer without enough information, he said.

“We can’t tell what the plans are going to look like and we don’t know what they’re going to cost,” Shock said. “Most employers like to be pretty decisive and pretty direct.”

Two recent independent studies of rates already filed by insurers in other states show there will be low-premium plans available, but those will be accompanied by high deductibles and copayments.

Under the health law, all plans on the new insurance marketplaces must offer the same coverage benefits, including free preventive care. All plans also will have a cap on total out-of-pocket costs: $6,350 for individuals, $12,700 for a family policy.

The federal government held a conference call Tuesday for stakeholders, such as Illinois health centers, insurance brokers and community groups receiving federal dollars to help with outreach. The AP was given access to a recording of the call by one of the stakeholders who listened to it live.

Several people asked on the call when the prices and policies would be made public, and each time, federal officials told them Oct. 1.

Federal officials didn’t explain why the insurance rates wouldn’t be released earlier, and a Health and Human Services spokesman didn’t directly answer a request from the AP for an explanation.

“When open enrollment begins on October 1, consumers and small business owners across the country will be able to shop for, apply and enroll in health coverage that meets their needs,” HHS spokesman Fabien Levy said in an email.

There could be many reasons for keeping the information under wraps. Making rates public now could give insurance companies that aren’t participating in the Illinois marketplace an unfair advantage. Federal officials also could be waiting until contracts are signed with insurers.

And there’s a political consideration: Officials in Democrat-led states have put a positive spin on rates, stressing that subsidies will lower costs. Officials in Republican-led states have emphasized how some of the marketplace rates are higher than current prices. Government officials may be hoping the focus on Oct. 1 won’t be on rates, but on how the technology of the marketplace is working.

Consumers have until Dec. 15 to enroll if they want their coverage to start Jan. 1, so federal officials may have decided it’s less confusing to let people see the prices as they shop instead of before.

The Illinois Department of Insurance submitted insurance companies’ marketplace proposals, which presumably include pricing formulas, to the federal government earlier this summer. That information has not been publicly disclosed. The Associated Press has made a Freedom of Information Act request to the department for that information.

If Illinois were running its own marketplace, the prices would be available by now, said Jim Duffett of the Campaign for Better Health Care, an Illinois group that supports the health care law and worked for a fully state-run marketplace.

“If the General Assembly had approved the bill to establish a state-based marketplace, those rates would have been announced last month,” Duffett said, “and people would have the comfort level of seeing how positive these rates are going to be.”

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