​Millions paying less than $100 per month for Obamacare

A major question about Obamacare was how pricing would shake out for consumers. Would it end up being ruinously expensive, or relatively light on the wallet?

Now the numbers are coming in, and it appears that for many Americans the health-insurance plans bought under the new government program are fairly affordable. Almost seven out of 10 people who bought plans through federally run marketplaces and who receive tax credits are paying monthly premiums of less than $100, the U.S. Department of Health and Human Services said on Wednesday. The study doesn't include data from the 14 states that operate their own insurance marketplaces.

Over the years, the high cost of health insurance has discouraged millions of Americans from enrolling for benefits. Obamacare, which launched this year under the Affordable Care Act, was created as a way to provide more competition and lower prices for workers who did not get insurance through their employers. The program's main mechanism for helping people afford coverage are tax credits based on income, with the government providing an average credit of $264 per month.


Critics, however, have pointed to the law's costs to taxpayers as a negative, noting that taxpayers will also pay more for the ACA's expansion of Medicaid.

The tax credits helped lower the average monthly premium to $82, with credits reducing the per-person premium by three-quarters, the government study found. Overall, 69 percent of people buying plans with tax credits are paying less than $100 per month.

About 5.4 million Americans bought health insurance through a federally run marketplace. The share of U.S. residents without health coverage has dropped to its lowest rate since 2008, according to Gallup.

Not all states around the U.S. offer the same rates or number of competing plans, however. On average, consumers have five issuers and 47 marketplace plans to pick from, but about 18 percent of the population only had access to one or two issuers, the study found.

More issuers could mean lower pricing, according to the health agency, noting that the second-lowest cost silver plan premium declined 4 percent in cost for each additional health insurer.

Average costs ranged from a high of $127 per month for New Jersey residents to a low of $15 per month for Mississippi residents.

"The marketplace represents a new market environment that will evolve over time and there are different theories on how competition will work in this setting," the report said. "The simplest view of competition suggests that as the number of issuers increase in a market, premium rates should decline."

  • Aimee Picchi

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