Obamacare to Lower Costs

The Affordable Care Act (“Obamacare”) will lead to an increase in Ohio’s raw health care premiums, but the increase will be more than offset by the law’s tax credits.

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The Affordable Care Act (“Obamacare”) will lead to an increase in Ohio’s raw health care premiums, but the increase will be more than offset by the law’s tax credits, according to an Aug. 29 study from the RAND Corporation, a reputable think tank.

Specifically, health care premiums will rise to an average of $5,312 under Obamacare in 2016. Without the law, premiums would reach an average of $3,973 that year.

But when Obamacare’s tax credits are plugged in, the average Ohioan will only pay a premium of $3,131 — $842 less than an individual Ohioan would pay without the law.

The tax credits will be available to individuals between 100 percent ($11,490 in annual income) and 400 percent of the federal poverty level ($45,960 in annual income). The subsidies will be smaller for higher income levels, and the raw premium will vary depending on the insurance plan, so the premium and subsidy numbers don’t apply across the board.

The numbers also only apply to Ohioans in the individual health insurance market. Under Obamacare, individuals will be able to enroll for health insurance through an online marketplace. The majority of Americans who get health insurance through their employers or public programs fall under different rules and regulations.

Obamacare will help more non-elderly Ohioans get health insurance. Without the law, 14.9 percent of non-elderly individuals would lack insurance. With the law, only 6.2 percent will go without insurance.

RAND attributes the difference in insurance rates to tax credits, which make health insurance more affordable, and the individual mandate, which requires certain Americans buy health insurance or pay a fine.

The numbers are good news for Obamacare. Federal officials say they expect to enroll 7 million people through individual marketplaces, but 2.7 million must be young adults. That’s because young adults tend to be healthier, which will help balance out sicker, older people flowing into health care plans.

The online marketplaces are supposed to open enrollment on Oct. 1. The actual plans will go into effect on Jan. 1. 

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