JACKSON, Mississippi — Mississippi is one of the poorest states in the nation, and its residents will pay some of the highest premiums under a federally run health insurance exchange, the Associated Press reported Wednesday.
The federal government released information Wednesday showing the estimated cost of a mid-range plan under the exchanges created through the Affordable Care Act will be $448 a month in Mississippi. That compares to an average of $328 in 47 states and the District of Columbia.
Costs are lower when federal subsidies and tax breaks are applied for those eligible.
People can start buying coverage Oct. 1. Two companies – Humana Health Insurance Co. and Magnolia Health Care – will participate in the exchange in Mississippi.
Insurance Commissioner Mike Chaney says Mississippi’s rates are high because of expensive health conditions and the relatively high cost of health care delivery, the Associated Press reported.
The only states with higher monthly premiums than Mississippi are Wyoming, at $516; and Alaska, at $474, according to the federal data.
The envisioned competitive marketplace has not materialized in Mississippi. With Humana Health Insurance Co. and Magnolia Health Plan the only companies agreeing to offer coverage on the exchange, many Mississippi will have no market choice.
Residents in counties other than Hinds, Rankin, Madison or Desoto can select coverage from either Human or Magnolia. Residents ogf other counties will not have a choice.
Until Wednesday, the Mississippi Department of Insurance was saying consumers in Mississippi would not know specific rates until the start of open enrollment Oct. 1. Coverage will begin Jan.1 for those who buy policies in the exchange.
In an interview last month, Chaney advised Mississippians to brace for high premiums. Regardless of age, shoppers on the state’s “Federally Facilitated Marketplace” will find health insurance premiums at least 100 percent above rates to which they have become accustomed, he said at the time.
Chaney approved the rates several weeks ago but they must be kept under wraps until the feds give the go-ahead to release them, the Mississippi Department of Insurance says.
Until Wednesday, the Department of Health and Human Services had an information blackout on the level of premiums the state’s residents could expect.
The federal government stepped in to build Mississippi’s health care exchange after Gov. Phil Bryant refused to let the Mississippi Division of Medicaid participate in preparing the exchange.
The move negated months of work Commissioner Chaney’s department had done preparing the market exchange.
The rates Chaney sent to the feds for approval specify a $3,075 deductible, and a base monthly rate of $300 that can grow to $900.
“The base rate is going to be a little more than $300, depending on where you live,” Chaney said last month.
Chaney said he expected the feds to give an OK to the rates he submitted. He declined to disclose them fully, saying he preferred to wait and let the feds reveal them since Washington will be running the exchange.
He insisted, though, that the rates he approved for marketplace carriers Humana and Magnolia were fair and in line with the higher rates that will accompany the new coverage mandates under the Affordable Care Act.
“If I thought the rates were excessive, I would not have approved them,” Chaney said. “In today’s market (post implementation of the market exchange) they are pretty competitive.”
The approvals set a monthly premium base rate of $312 for Magnolia Health Plan and $302 for Humana.
The base rate reflects a three-to-one ratio that applies to what a 30-year-old non-smoker can buy coverage for on the individual market today. More simply, insurers on the exchange can set premiums three times above current individual market rates. That’s how, Chaney said, Magnolia and Humana set monthly rates for a 64-year-old non-smoker at about $900.
Figures cited by Chaney are for the Affordable Care Act’s “Silver Plan,” an offering that includes all of the coverage requirements of the Act.
The Silver Plan carries an average annual deductible of $3,075 across all age categories, according to Chaney.
The Affordable Care Act mandates that all Americans be covered after Jan. 1, though it provides subsidies for low-and-moderate income individuals.
Chaney said he expects the state’s insurance exchange to gain more providers in the next few years.
Specifically, availability could improve in 2015 or 2016. By then multi-state plans may be offered in Mississippi. The national Blue Cross and Blue Shield Association and UnitedHealth are expected to offer national plans.