Federal health site premiums, number of insurers vary widely by area

WASHINGTON — Consumers shopping on the federal health exchange for 2016 plans will still be able to pick from about five insurance companies, but there will be fewer plans on average to choose from, federal health officials said Friday

About 90% of consumers who return to Healthcare.gov will have plans from three or more insurers to choose from for 2016 coverage, Department of Health and Human Services officials said.

Open enrollment start Sunday on the federal and state exchanges set up under the Affordable Care Act.

Some areas have become less competitive as non-profit insurance cooperatives have left the market. Ten of 23 such co-ops created under the law have closed.

Price competition improves with three or more competitors in a market according to research, HHS assistant secretary for planning and evaluation Richard Frank said.

Still, what you pay depends a lot on where you live — and whether you are eligible for tax credits to reduce the premium cost. (Subsidies are also available to reduce out-of-pocket costs for many low income consumers.)

Before tax credits, the average premium for the second lowest cost silver plan for a 27-year-old male earning $25,000 a year is $272 in New Jersey. In Michigan, however, it drops to $212 and it jumps to $379 in Wyoming. These silver plans act as the benchmark plans that determine how much eligible people can get in tax credits.

"We're assessing what the best thing to do is to promote health and competition in all markets," Frank said.

In 2016, consumers can choose from an average of almost 50 plans in their county, compared to an average of 58 for 2015. HHS says insurers have dropped plans that didn't prove as popular.

In Wyoming, the number of insurers selling plans in the state dropped from two to one, while West Virginia went from one to two insurers. Arizona has three fewer insurers selling plans and Florida lost two, although both states have strong competition in most areas.

Texas, on the other hand, has added three insurers to total 17.

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Many consumers have complained about the rising premiums in areas that lack much competition.

Allison O'Toole, interim CEO of Minnesota's health exchange MNsure, told reporters this week that the exchange was already receiving calls from consumers who are concerned about double-digit insurance premium hikes for next year.

Oklahoma dropped from three insurers to two. Steve Fatula, who lives near Calera, Okla., says he will likely pay the $695 penalty for not having insurance rather than pay the 60% more he'd have to pay to keep his current plan. The other plan options save far too little to make it worth keeping insurance, he says.

"The whole thing angers me," says Fatula, a computer programming and system integration consultant.

Fatula says he feels like the Affordable Care Act did nothing to make insurance affordable for people who aren't eligible for the tax credits that are available to those earning less than 400% of the federal poverty limit. ($97,000 for a family of four)

Even if premiums are affordable for those who don't receive tax credits, Fatula notes they still need to be able to afford the deductibles and medications. One of his prescriptions had such a huge price increase, he started buying it in Canada.

"What they did was pay for peoples premiums, but that did not change the system itself," he says. "Eventually, no one will be able to afford coverage unless (health care) costs are somehow contained."