Contrary to the plan of reducing health insurance premiums through health insurance marketplaces, it seems that Mississippi residents who purchase health insurance off exchanges might encounter higher premiums than the current market average. Pundits are claiming that the rise in insurance premiums can be attributed to the fact that only two insurance carriers will be participating in the exchange.
As of now, 54,000 uninsured residents will have the choice of Humana and Magnolia Health for their insurance needs. Preliminary calculations are showing the average premium at $312 for Magnolia and $302 for Humana. In defense of this estimation, Mississippi officials have pointed out certain imperative aspects of these insurance premiums.
1) Increased Coverage and Better Quality – In light of the higher premiums, officials state that the increased coverage and better quality of provided insurance is going to offset the higher premiums. In a nutshell, the premiums would still be competitive according to today’s market standards.
2) Essential Health Benefits Coverage – In addition to the increased coverage and better quality of health insurance, every policy will have essential health benefit coverage. This essential health benefits coverage will be a guarantee of coverage for some health expenses for everyone who buys insurance off the marketplaces.
3) Availability of Tax Subsidies – The insurance premiums are just indicative and do not include major discounts that most residents are eligible for through federal tax subsidies. Most residents would be able to take advantage of the tax subsidies, which would further lower their insurance premiums.
When you consider these premium rates after putting in the above three variables, it becomes obvious that the Mississippi health insurance premiums are only slightly above average compared to today’s rates.
Decreasing Premium Costs by 2015
Even though the higher insurance premiums turn out to be pretty competitive for most Mississippi residents after the above calculations are put into the mix, state officials are not complacent. A glimpse into the future strategy of Mississippi reveals that officials plan to introduce some heavyweight insurance carriers in their exchange navigator program.
The ingenuity of this move lies in the fact that when bigger, better players enter the market, they will be in a position to compete against the prevailing rates with more options and competitive rates. If Mississippi successfully executes this strategy, the health insurance marketplace should thrive with multiple insurance carriers and more competitive rates by the end of 2014.