Hoosiers will have to pay an average of 72 percent more for individual health insurance, Indiana Department of Insurance Chief Deputy Commissioner Logan Harrison told the Health Finance Commission Monday.
This increase will be the result of the implementation of federal health exchange laws under the Affordable Care Act in January 2014.
But, state Democrats are questioning the accuracy of the department's findings.
"I think Hoosiers should be very leery of this report," Assistant Democratic Leader Jean Breaux, D-Indianapolis, said in a statement. "The report leaves out any information on tax credits available to Hoosiers to put toward the cost of coverage, along with an inflated and flawed assumption on the average cost as a whole."
- Photo by Ellie Price, TheStatehouseFile.com
- Logan Harrison, chief deputy commissioner of the Indiana Department of Insurance, said Hoosiers will have to pay an average of 72 percent more for individual health insurance.
"It is an average increase, and we have always put out average numbers, as... the federal government has," Harrison said. "Because there's no metallic plans to compare it by, we can, again, get premium ranges that will be able to be a little more helpful for Hoosiers as far as planning. But, again, they are ranges."
The "metallic" plans are the different levels of health coverage that will be available to Hoosiers under the federal exchange program: bronze, silver, gold and platinum. Each plan includes 10 statutory benefits, the minimum number that is required to avoid the law's mandate that individuals have insurance.
People who choose the bronze plan will have 60 percent of their medical bills paid for. The silver plan will cover 70 percent, the gold plan will cover 80 percent and the platinum plan will cover 90 percent.
Harrison said after the bronze plan, each successive plan will have "extra bells and whistles" - meaning benefits - buyers can choose to purchase. Additionally, the more coverage the plan provides, the higher the premium.
Democrats say the state's report fails to account for these different levels of coverage - and prices - which drives the average increase up.
"The beauty of this system is that each Hoosier gets to choose the plan that works best for their budget and lifestyle," Breaux said in a statement. "Therefore, basing their report on incomplete premium pricing information calls their entire method into question."
Additionally, Democrats say the report ignores the affect of new tax credits that will become available to Hoosiers will have on insurance costs.
Small business rates will only increase by 8 percent, according to the report. Harrison said the reason is that small businesses won't feel the "shock" as heavily as individuals is there are already laws in place that require insurers to provide health insurance to any small business owner who applied.
Indiana is one of 27 states that chose to let the federal government run its health care exchange, rather than creating its own. Only 17 states chose to create state-run exchanges.
Harrison said one reason Indiana chose to defer to the federal government because Indiana officials estimated it would have had to pay $45.6 million to $64 million to pay for a state-run exchange. The state will have to pay $13.5 million to $16.5 million for the federal exchange.
The federal exchange will offer multiple services to insurance purchasers, including a toll-free number to help with technological issues, exemption from the individual mandate, and a navigator program to help purchasers choose their insurance. Additionally, the federal exchange makes some Hoosiers eligible for advanced-premium tax credits, the same tax credits Democrats say the report ignores.
Harrison said the state will submit its plan to the federal government for approval this week. He also said although the federal government does have the ability to exclude some insurance providers from the state's exchange, that is unlikely to occur.
Indiana currently has four main health care providers that were included in the plan sent to the federal government: Anthem Insurance, Coordinated Care, MD Wise and Physicians Health Plan of Northern Indiana. Anthem is the only provider that would be available statewide. All other providers would be available by region.
The report estimates that by 2020, insurance rates will be up 75 to 95 percent.
Olivia Covington is a reporter for TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.