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Insurance exchange rates come in lower than requested

The rates that insurers will charge for policies purchased through an exchange created under the federal health care law are at levels as much as 25 percent below what had originally been requested, officials said Monday.

The state Insurance Department released the proposed rates for 71 qualified health insurance plans that will be sold on the individual market in the new Health Insurance Marketplace.

Under the federal Affordable Care Act, enrollment begins Oct. 1 and rates and coverage will go into effect Jan 1.

“All plans meet the requirement that health insurance coverage be offered to everyone, even those with pre-existing medical conditions,” state Insurance Commissioner Jay Bradford said in a news release. “The plans cover 10 essential health benefits, have no annual or lifetime limits and have no ratings on health factors.”

Because of new tax credits available for assistance in paying premiums, few Arkansans will pay the total premium amount, Bradford said.

For a 30-year-old individual in Arkansas, the average base premium of plans to be sold in the exchange will be $284.74 a month. For someone with an annual income of $17,235 annually, the monthly tax credit would be $227.29 and the monthly consumer payment would be $57.45.

For someone making $22,980 a year, the monthly tax credit would be $164.10 and the monthly consumer payment would be $120.65.

With an annual salary of $28,725, the monthly tax credit would be $92.04 and the monthly consumer payment would be $192.70.

David Dillon, an actuary for the agency, said the premium rates were reviewed for reasonableness and that the “resultant change in premiums is generally lower than what was expected by independent forecasters.”

The average approved rate in the individual market is about 10 percent below what was projected by the Society of Actuaries,” he said.

Insurance premiums for all individuals will vary only by age, geography, family size and tobacco. Three levels of plans — bronze, silver and gold — will be available. The bronze plans are likely to have lower premiums but higher out-of-pocket costs for medical services are approved, officials said. In addition, plans with higher deductibles are available for young adults under the age of 30 and certain other eligible individuals.

The state Legislative Council on Friday postponed its review of a $5.1 million contract for a campaign to publicize the new health insurance exchange, saying it wanted to wait until information was released on the rates that insurers will charge in the exchange.

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